Suppose a country's net exports equal 0. If the volume of imports increases without any change in the volume of exports, the country will experience a ________
A) trade deficit B) budget deficit C) trade surplus D) budget surplus
A
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In first degree price discrimination,
a. each consumer pays the same price. b. all consumer surplus is captured by the seller. c. the seller separates the buyers into different groups. d. the seller charges different prices per unit for different quantities.
Keynes argued that because of sticky prices and wages
A) the short-run aggregate supply curve could be horizontal. B) the short-run aggregate supply curve is probably vertical. C) the long-run aggregate supply curve slopes downward. D) the aggregate demand curve is vertical.
Suppose medical care makes up 10 percent of the CPI index, and that prices rise in the medical care area faster than in the rest of the economy. An elderly couple spends 30 percent of their income on medical care. For this couple, the CPI
A. understates the inflation rate because the CPI always understates inflation. B. is a good measure of inflation since the bias inherent in the CPI is offset by the increased emphasis on health care for this family. C. overstates the inflation rate because this family is not typical of the country as a whole. D. understates the inflation rate because of the importance of medical care for this family.
When a regulator is concerned about pleasing different groups in order to keep employed, this is known as the
A) share-the-gains, share-the-pains theory. B) regulatory hypothesis. C) capture hypothesis. D) creative theory.