An increase in injections into the economy may lead to:
a) An outward shift of aggregate demand and demand-pull inflation
b) An outward shift of aggregate demand and cost-push inflation
c) An outward shift of aggregate supply and demand-pull inflation
d) An outward shift of aggregate supply and cost-push inflation
Answer: a) An outward shift of aggregate demand and demand-pull inflation
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The figure above represents the behavior of total revenue as price falls along a straight-line demand curve. Unit elasticity of demand occurs at
A) point g. B) point h. C) point i. D) point j.
Although foreign exchange market trades are said to involve the buying and selling of currencies, most trades involve the buying and selling of
A) bank deposits denominated in different currencies. B) SDRs. C) gold. D) ECUs.
The marginal rate of technical substitution is
A. the rate at which the firm can substitute labor for capital while holding total cost constant. B. the rate at which the firm can substitute labor for capital while holding output constant. C. the market rate of exchange between labor and capital. D. both a and b E. both a and c
Which of the following statements about a trade bloc is accurate?
A. The gains from a trade bloc are shared equally by each member. B. A trade bloc may lower firms' costs by allowing them to exploit economies of scale. C. Increased competition within a trade bloc can result in higher commodity prices in the domestic markets of the member countries. D. A trade bloc can increase the opportunities for domestic business investments but usually repels foreign direct investments into the member countries.