What are two ways in which long-term economic growth is measured?
What will be an ideal response?
Ans: Increases in total output and per capita total output.
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The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a substitute product
Indicate whether the statement is true or false
To be effective, a price ceiling must be below the market equilibrium price
Indicate whether the statement is true or false
Rational expectations are forecasts
a. that, while not necessarily correct, are the best that can be made given the available data. b. that are technically correct. c. that accurately predict the short-term trade-off between inflation and unemployment. d. made by economists using the most sophisticated econometric models.
Suppose Japan exports televisions to the United States and imports sugar from Argentina. This situation suggests
a. Japan has a comparative advantage relative to the United States in producing televisions, and Argentina has a comparative advantage relative to Japan in producing sugar. b. Japan has a comparative advantage relative to the United States in producing sugar, and Argentina has a comparative advantage relative to Japan in producing televisions. c. Japan has an absolute advantage relative to the United States in producing televisions, and Argentina has an absolute advantage relative to Japan in producing sugar. d. Japan has an absolute advantage relative to Argentina in producing sugar, and the United States has an absolute advantage relative to Japan in producing televisions.