When a nation has no funds to finance economic development, how can it acquire the needed funds? Is the country a net lender or a net borrower?
What will be an ideal response?
Funds for development can be borrowed from other nations. In this case, the borrowing nation is a net borrower in its capital account.
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The aggregate expenditure (AE) curve
A) includes expenditures by domestic residents only. B) does not include expenditures on either imports or exports. C) includes expenditures on foreign as well as domestic goods. D) includes all expenditures on domestic goods. E) adds expenditures on imports because they are consumed in the nation and subtracts expenditures on exports because they are consumed abroad.
Which of the following was NOT cited as contributing to unusual uncertainty having an adverse effect on aggregate supply?
A) the possibility that Congress may let the 2001, 2003 tax cuts to expire B) the Fed's limited use of monetary policy in fighting the recession C) the severity of the financial crisis D) concern that the Affordable Care Act would increase the cost of hiring workers
Happy Bagels sells its bagels for $6 each and the firm has a constant marginal cost of $4 per bagel, which is equal to its (constant) average total cost. If Happy Bagels does not sell a bagel the day it is produced, the bagel is sold as day-old for $2. If Happy Bagels is currently holding 50 bagels in inventory and the probability that Happy Bagels will sell 50 bagels or more is 0.50, which of
the following statements is true? A) Happy Bagels is holding the profit-maximizing, optimal level of inventory. B) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to increase its inventory. C) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to decrease its inventory. D) To obtain the profit-maximizing, optimal level of inventory, Happy Bagels needs to double its inventory.
Which one of the following is based on the idea that the marginal utility of income diminishes as income increases?
a. Progressive taxation b. Capital controls c. Minimum wages d. Price controls e. Employee compensation regulations