Variability in exchange rates of currencies used in international trade
A. causes a complete breakdown of trade.
B. renders the theory of gains from trade null in practice.
C. brings with it a host of complications in trade policy.
D. has no impact on trade.
Answer: C
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The Bank of Japan is Japan's central bank. As part of its duties, the Bank of Japan would
A) provide banking services to Japan's citizens and firms. B) provide banking services to foreigners. C) control the quantity of money in circulation in Japan. D) change tax rates.
Potential GDP in the United States
A) declines over time. B) changes over a given business cycle. C) does not change over time. D) grows as the economy grows.
Which of the following is not equal to the others in equilibrium?
A) the real wage B) the marginal rate of substitution between leisure and consumption C) the marginal product of labor D) the price of consumption
OECD data for 1960 through 1999 indicates that a 10 percent increase in government expenditures as a percent of GDP
a. increases economic growth by about 5 percent. b. increases economic growth by about 2 percent. c. has no effect on economic growth. d. reduces economic growth by about 1 percent.