Under normal circumstances, the ratio of a country's export prices to its import prices should
a. increase as trade increases
b. decrease as trade increases
c. fluctuate as trade increases
d. remain constant as trade increases
e. none of the above
A
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Which of the following is true with regard to the supply of money?
A) an open market sale of government securities will increase liquidity B) an open market purchase of government securities will decrease liquidity C) liquidity and the money supply are directly related D) all of the above E) none of the above
When an economy's simple spending multiplier is 2.5, then its marginal propensity to consume is 0.4
a. True b. False Indicate whether the statement is true or false
Fixed costs are those costs that remain fixed no matter how long the time horizon is
a. True b. False Indicate whether the statement is true or false
There is a federal budget deficit when
A) the government spends less that it collects in taxes. B) the government spends more that it collects in taxes. C) the government spends the same amount it collects in taxes. D) taxes are too high.