As productive capital goods are established in developing nations
A) developed nations will become less prosperous.
B) these countries will experience higher rates of economic growth.
C) portfolio investment will be replaced by loans from international aid agencies.
D) they will be less likely to engage in international trade.
B
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The Fed raises the federal funds rate. Which of the following changes takes the longest time before it occurs?
A) Quantity of money decreases. B) Exchange rate rises. C) Supply of loanable funds decreases. D) Aggregate demand decreases. E) Short-term interest rates rise.
If you observe a market where quantity demanded doesn't equal quantity supplied, a logical conclusion is that:
A. the fallacy of composition is not operative in the market. B. social and political forces are likely to exist. C. the law of demand and supply do not hold in the market. D. the invisible hand is the only force at work in the market.
The substitution effect is the change in the quantity demanded of a good that results from
a. the effect of a change in the price on consumer purchasing power. b. the effect of a change in the price making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. c. either a or b d. none of the above.
One piece of evidence that possibly supports the bounded-rationality assumption of behavioral economics is that experiments appear to have shown that
A) people make different decisions in calm situations than in situations in which emotions come into play. B) people make the same decisions in calm situations than in situations in which emotions come into play. C) total utility is maximized when marginal utility is equal to zero. D) total utility is declining when marginal utility is negative.