The table below shows data for the United States
Nominal Interest Rate Inflation Rate
2013 5.25 4
2014 5 2
2015 4.5 4.3
Between 2013 and 2014, the real interest rate ________ and caused a ________ the demand for loanable funds curve.
A) increased; rightward shift
B) decreased; leftward
C) increased; movement upward along
D) decreased; downward along
C
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A deadweight loss occurs when the market is functioning efficiently
Indicate whether the statement is true or false
Suppose the domestic market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the domestic market supply function is Qs = 2.5P - 7.5. Suppose further that the world price for the good in question is $3.40 per unit. How much deadweight loss would be caused by a $1.20 tariff on imported units of this good?
A. $3,200 B. $3,600 C. $5,400 D. $3,000
Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,
a. Belarus should export linen to Russia. b. Russia should export linen to Belarus. c. trading linen would provide no net advantage to either country. d. Without additional information about opportunity costs, this question cannot be answered.
A cost imposed on people other than the consumers of a good or service is a:
a. price floor. b. negative externality. c. price ceiling. d. positive externality.