Unemployment and inflation are important determinants of short-run material welfare, whereas productivity growth is an important determinant of long-run material well-being
a. True
b. False
Indicate whether the statement is true or false
True
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What is the impact of a government subsidy to producers?
A) Less is produced relative to the efficient level, creating a deadweight loss. B) More is produced relative to the efficient level, creating a deadweight loss. C) Producer surplus is increased, which creates a larger consumer surplus. D) Producers are able to sell the product at a higher price. E) Consumers must pay a higher price for the good.
Suppose a developing country receives more machinery and capital equipment as foreign entrepreneurs increase the amount of investment in the economy. As a result
A) the economy will move up along the long-run aggregate supply curve. B) the long-run aggregate supply curve will shift to the left. C) the long-run aggregate supply curve will shift to the right. D) the economy will move down along the long-run aggregate supply curve.
An option may add value to a transaction because:
a. interest charges are reduced. b. the price of the good is reduced. c. additional information may become available. d. options provide buyers with monopsony power.
Suppose the government of South Island fixes the exchange rate of its currency, the Islandia, in terms of the U.S. dollar. Initially the exchange rate is set at $1 per Islandia. In a crisis, the government changes the exchange rate to $0.50 per Islandia. This is an example of a(n):
A. revaluation. B. devaluation. C. appreciation. D. depreciation.