If the MPS = .25, and investment falls from $100 to $75, real GDP will decrease by:
a. $25.
b. $75.
c. $150.
d. $125.
e. $100.
e
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Refer to Figure 4-9. What area represents consumer surplus after the imposition of the price floor?
A) A + B B) A + B + E C) A + B + E + F D) A
The value of the put option rises when the underlying asset
A) experiences price increases. B) experiences price declines. C) experiences reduced volatility. D) has a relatively short maturity.
Which of the following is a primary cause of exchange rate movements in the short run?
a. Changes in relative interest rates. b. Changes in expectations of future exchange rates. c. Changes in relative prices. d. Changes in economic conditions such as relative GDPs. e. None of the above.
Countries tend to specialize in the production of goods in which they have a comparative advantage because
A) government officials calculate opportunity costs and suggest to people what they ought to produce. B) people want to make a profit. C) the Economic Development Office of the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. D) the United Nations hires economic experts to calculate the opportunity costs of different goods in different countries and then suggests to countries what they ought to produce. E) none of the above