Even though international trade in undertaken voluntarily, a country that engages in trade may not benefit from it
a. True
b. False
Indicate whether the statement is true or false
False
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In the basic two-period model,
A) credit markets have frictions. B) the government borrows at a lower interest rate than do consumers. C) some consumers will always default on their debts. D) consumers do not default on their debts.
To maximize profit, a monopolist should produce the level of output at which
a. price equals marginal cost b. price equals marginal revenue and marginal cost c. price equals marginal revenue d. marginal revenue equals marginal cost e. price equals average total cost
Suppose a bank will pay you a 10% interest rate on your deposits for one period. In this case you must sacrifice $10 of current consumption to finance:
a. $9 of future consumption b. $10 of future consumption c. $11 of future consumption d. $1 of future consumption e. none of the above
Suppose the central bank reduces the money supply. This monetary contraction will always cause a greater reduction in output when it is accompanied by
A) an increase in expected future taxes. B) an increase in expected future interest rates. C) a reduction in expected future output. D) all of the above E) none of the above