An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply.
B. increase in aggregate demand.
C. increase in short-run aggregate supply.
D. decrease in aggregate demand.
Answer: D
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Mutually beneficial international trade between two countries depends on
a. each country having an absolute advantage in the production of a different good b. one country being worse (requiring more resources) than the other in the production of every good c. at least one country having a zero opportunity cost in the production of at least one good d. one country being relatively better at producing a good (which makes the other country relatively worse at it) e. one country being relatively better at producing all goods
As conventionally measured, budget deficit and surplus calculations include the revenues and expenditures of
a. only current government operations; government trust funds are omitted. b. all government trust funds except Social Security. c. the Social Security Trust Fund, but other government trust funds are omitted. d. all government trust funds, including Social Security.
Which of the following is a typical example of an increasing-cost industry?
a. a tuna fishing company b. a safety pin maker c. a department store d. a bank
Market failure implies that a policy of laissez-faire:
A.) Leads the economy to a point beyond the production possibilities curve. B.) Leads the economy to an undesirable point on the production possibilities curve. C.) Is superior to government intervention. D.) Causes government failure.