Monetarists argue that an exogenous fall in investment spending leads to
A) declining real output.
B) declining money supply.
C) declining velocity.
D) declining interest rates.
D
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Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive,
A) Mexico will produce more soybeans once trade is introduced. B) the United States will produce more avocados once trade is introduced. C) avocado prices in the United States will fall once trade begins. D) soybean prices in Mexico will rise once trade begins.
Answer the following statements true (T) or false (F)
1. Only in developing nations would one expect the value of either exports or imports to exceed 200 percent of gross national product. 2. In dollar value, the United States is the largest importer in the world. 3. The value of U.S. exports is about 10 percent of its GDP. 4. Although political arguments strongly favor free trade, most decisions affecting international trade are made in the economic arena. 5. The only factor determining whether a country can develop a comparative advantage in production is the degree to which it has a highly skilled labor force.
The use of money for exchange:
A. encourages more specialization in production. B. increases the importance of a coincidence of wants. C. increases the use of barter. D. reduces consumer sovereignty.
If the real deficit is $200 billion, the inflation rate is 5 percent, and the debt is $3 trillion, then the nominal deficit is:
A. $300 billion. B. $350 billion. C. $250 billion. D. $100 billion.