The return on wealth is
A) a stock variable.
B) income.
C) equal to the opportunity cost of holding capital.
D) a stock or flow variable depending upon whether the wealth is in the form of bonds or other financial assets.
Answer: B
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Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and wages and prices are rising
If contractionary policy is used to move the economy back to long run equilibrium, this would be depicted as a movement from ________ using the static AD-AS model in the figure above. A) D to C B) A to E C) C to B D) B to A E) E to A
What is the term that describes a situation in which one party to an economic transaction has less information than the other party?
A) monopsony B) asymmetric information C) inefficient market hypothesis D) unequal market structure
In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage. One reasons for this is
A) some countries have more resources than other countries. B) production of most goods involves increasing opportunity costs. C) tastes for many traded goods are similar in many countries because of globalization. D) comparative advantage works better in theory than in practice.
In the United States, in the early 1800s,
A) Southern farmers favored high tariffs while Northern manufacturers opposed them. B) all sectors opposed high tariffs. C) all sectors favored high tariffs. D) Southern farmers opposed high tariffs while Northern manufacturers favored them.