Which of the following statements represents a correct and sequentially accurate economic explanation?
A) Business taxes rise, investment falls, total expenditures on goods and services falls, AD rises, and the AD curve shifts rightward.
B) The dollar depreciates, net exports rise, total expenditures on goods and services rises, AD rises, and the AD curve shifts rightward.
C) The interest rate falls, consumption rises, total expenditures on goods and services rises, AD rises, and the AD curve shifts rightward.
D) b and c
E) a, b, and c
D
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Refer to the scenario above. What is the purchasing power parity-based exchange rate between the two currencies?
A) 0.4 units of Country 1's currency for $1 B) 2.5 units of Country 1's currency for $1 C) 1.2 units of Country 1's currency for $1 D) 1 unit of Country 1's currency for $2.50
The study of the decision-making process of government is the study of:
a. Keynesian economics. b. public choice theory. c. rational expectations theory. d. social economics.
Jim enjoys the feeling of wind in his hair enough to ride his motorcycle without a helmet, even though he fully realizes the greater potential for injury it creates by not wearing one in the unlikely event he is in an accident. To an economist, Jim is
a. making an irrational choice. b. making a rational choice. c. not fully considering the personal costs and benefits of his decision. d. not responding to the incentives he faces.
A natural monopoly exists when
A. economies of scale occur. B. the firm holds a patent. C. there are governmental entry restrictions. D. the firm owns all of the raw materials needed to produce the product.