If the supply price of land is zero, including costs of transporting goods produced on the land to the market, then
a. positive rents are paid for the acres furthest from the market
b. there are no rent-yielding acres
c. the demand for land must be infinitely high
d. population growth must be high
e. landowners will reap higher rents
B
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When a U.S. company makes a $200,000 donation to the International Red Cross to help the victims of an earthquake in India, the transaction is recorded in the
A) current account. B) one-way donations account. C) international help account. D) capital and financial account. E) official settlements account.
In a two-period model with default, if the nation defaults on its debts in the future period
A) there are no consequences. B) it bears a cost v. C) collateral is seized. D) it faces a higher interest rate.
Natural disasters like severe earthquakes are devastating to the economy as well as to the individuals harmed due to
A) supply shocks. B) demand shocks. C) demand-pull inflation. D) demand-pull deflation.
A country with a strong bargaining power is likely to direct the terms of trade in its favor
a. True b. False Indicate whether the statement is true or false