During periods of U.S. prosperity,
a. imports from other countries are undesirable
b. imports from other countries are sought out
c. countries importing goods to the U.S. may use their earnings to buy American goods
d. countries importing goods to the U.S. are unable to buy American goods
c
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Explain the concepts of cross-price elasticity of demand and income elasticity of demand. What do positive and negative values indicate for each of these demand elasticities?
What will be an ideal response?
A price discriminating monopsonist could increase its profits by
a. paying the minimum wages possible. b. hiring as little capital as possible. c. paying lower wages to workers with inelastic supply of labor curves than to workers with elastic curves. d. paying lower wages to workers with elastic supply of labor curves than to workers with inelastic curves.
If China were to adopt a floating exchange-rate regime, it would:
A. cause the Chinese trade balance to fall. B. cause the U.S. trade balance with China to fall. C. force the U.S. to adopt a fixed exchange rate to maintain the balance of trade. D. de-stabilize the entire world economy.
What do rational expectations theorists believe? What is their critics' point of view?