Choose the letter of the diagram in Figure 36.2 that represents the shift in the foreign exchange market for dollars given the following situation, ceteris paribus: The Japanese remove some tariffs on American goods.
A. a.
B. b.
C. c.
D. d.
Answer: D
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If the consumption function is defined as C = 7,250 + 0.8Y, what is the value of the multiplier?
A) 0.2 B) 0.8 C) 1.25 D) 5
The price system has
A) prices fixed by the government. B) prices fixed by the seller. C) voluntary exchange. D) prices fixed by the producer.
Which of the following will NOT cause market supply to increase?
A) an increase in the number of firms supplying the product in the market B) a change in technology which allows a larger level of production at every price C) an increase in the costs of resources used to produce the product D) a decrease in labor costs
When a person possesses a comparative advantage in the production of one good or service, it: a. means that the person's opportunity cost of producing that good or service is higher than for that of other goods. b. discourages specialization
c. promotes greater self-sufficiency. d. permits gains from trade to be realized due to a more efficient use of resources.