If nominal GDP is growing more quickly than real GDP, which is most likely?
A. rising prices
B. falling prices
C. an expansion
D. a recession
Ans: A. rising prices
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In the Edgeworth Box, we can set one price to 1 and only need to solve for the other price because only relative prices matter for individual choice when income is drawn from endowments.
Answer the following statement true (T) or false (F)
International trade occurs whenever
a. two nations have achieved internal economic efficiency b. one of the trading nations is self-sufficient c. one nation can profit from trade at the expense of another d. two nations can benefit from trading with each other e. labor is cheaper in one country than in another
A banker motivated by profit maximization may make decisions that destabilize the banking system
a. True b. False Indicate whether the statement is true or false
Derived demand:
A. is the sum total of all factors of production for a given good or service. B. is only computed for the long-run demand decisions based on short-run marginal changes. C. refers to the demand for variable inputs when at least one fixed input exists. D. refers to the supply decisions of a final good influencing the demand for the inputs needed to make it.