Japan exports cars to the other countries of the world. In an open economy Japan is most likely to have a domestic price that is ________ the world price of cars.
A. less than
B. close to
C. equal to
D. greater than
Answer: C
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If Brazil has a comparative advantage relative to Cuba in the production of sugar cane, then
A) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba. B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba. C) the explicit cost of production for sugar cane is lower in Brazil than in Cuba. D) the average cost of production for sugar cane is lower in Brazil than in Cuba.
Given the quantity theory of money demand, a doubling of the money supply will lead to a
A) halving of the velocity of money. B) doubling of the level of real output. C) doubling of the level of nominal output. D) rise in the level of interest rates.
When the U.S. dollar depreciates against other currencies:
a. foreign goods become less expensive to U.S. buyers. b. U.S. goods become more expensive to foreign buyers. c. foreign currencies depreciate against the U.S. dollar. d. the volume of U.S. imports decline. e. the volume of U.S. exports decline.
Many economists agree that this difference is due to all of the following reasons except:
A. Since the 1950s, the economy has become more service oriented and less dependent on the production of goods. B. Since the 1950s, the federal government has stabilized the economy by using active fiscal and monetary policies C. Since the 1950s, people have become more rational and control their spending behavior countercyclically. D. Since the 1950s, the unemployment insurance program and other government transfer programs have aided the economy.