Which of the following scenarios describes how domestic consumers are affected when sugar is exported and sold domestically at the world price?
a. Prices for sugar are higher.
b. Prices for sugar are lower.
c. Sugar is no longer available.
d. Prices for all goods in the economy rise.
a. Prices for sugar are higher.
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Net unilateral transfers would appear in a nation's
A) current account. B) capital account. C) official reserve transaction account. D) financial account.
The Fed and the government are working against each other if, as the government cuts taxes to promote economic growth, the Fed
A. sells government securities. B. buys government securities. C. lowers the discount rate. D. lowers the prime rate.
When an economy is in a recession, discretionary fiscal policy would call for ________, and the automatic stabilizers would ________.
A. lowering tax rates; lower tax revenues B. increasing tax revenues; increase tax rates C. increasing tax rates, lower tax revenues. D. increasing tax rates; increase tax revenues
The supply curve of labor to industry in the Lewis model is horizontal if there is surplus labor in agriculture. This condition persists as long as
a. the marginal product of labor is less than the average product of labor in agriculture. b. the marginal product of labor in agriculture is less than the marginal product of labor in industry. c. there are diminishing returns to labor in agriculture. d. the marginal product of labor in agriculture is zero.