The deteriorating-terms-of-trade argument has been used to justify import-substitution policies
a. True
b. False
Indicate whether the statement is true or false
True
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Microeconomics is the study of aggregate behavior in the economy
Indicate whether the statement is true or false
If two goods have a ________ cross-price elasticity of demand, then the antitrust agencies can conclude that the products ________ compete in the same market as strong substitutes.
A) large; do not B) small; do C) zero; do D) large; do
Budget constraints exist for consumers because
a. their utility from consuming goods eventually reaches a maximum level b. even with unlimited incomes, they have to pay for each good they consume c. they have to pay for goods and they have limited incomes d. prices and income are inversely related e. demand curves for goods generally slope downward
To compare GDPs over time, we may want to adjust for the effect of inflation; therefore,
a. real GDP is converted into nominal GDP by subtracting the inflation rate from real GDP b. nominal GDP is converted into real GDP by subtracting the inflation rate from nominal GDP c. nominal GDP is converted into real GDP by dividing nominal GDP by the GDP deflator, then multiplying by 100 d. nominal GDP is divided by the inflation rate, then multiplying by the price index e. the ratio of the consumer price index to the GDP deflator is multiplied by the real GDP