Assume that both the United States and Germany produce beef and computers. The U.S. can produce 200 computers or 1,000 pounds of beef per day. Germany can produce 500 computers or 250 pounds of beef per day. Graph the PPCs for each country, putting computers on the horizontal axis. Then identify the slopes of the PPCs. What does the slope represent?
What will be an ideal response?
Graphs should show:
Germany: horizontal intercept = 500, vertical intercept = 250, slope = -1/2.
U.S.: horizontal intercept = 200, vertical intercept = 1,000, slope = -1/5
The slope of the line represents the opportunity cost of the good on the horizontal axis (computers).
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A U.S. citizen's income from investment in foreign countries is _____ in the U.S. current account
a. recorded as a deficit b. recorded as a surplus c. recorded as a debit d. recorded as a credit e. not recorded
Horizontal mergers are pretty rare in the United States due to antitrust laws
Indicate whether the statement is true or false
Which of the following is true?
a. Monetary policy influences long-term real interest rates more than short-term interest rates. b. Short-term interest rates are primarily determined by real factors and the expected inflation. c. A shift to a more expansionary monetary policy will tend to raise short-term interest rates. d. A shift to expansionary monetary policy that increases the fear of future inflation will tend to increase long-term interest rates.
Which of the following is a major goal of short-run macroeconomic policy?
A. Shift the production possibilities curve outward. B. Shift the aggregate supply curve to the left. C. Move toward the production possibilities curve and full employment. D. None of the choices are correct.