The terms of trade reflect the:
A. rate at which gold exchanges internationally for any domestic currency.
B. ratio at which nations will exchange two goods.
C. fact that the gains from trade will be equally divided.
D. cost conditions embodied in a single country's production possibilities curve.
B. ratio at which nations will exchange two goods.
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If the equilibrium price level is 135 but the actual price level is 150, then
A) firms increase their production because they are able to sell their output at a higher than expected price. B) aggregate demand will decrease to restore equilibrium. C) aggregate demand will increase to restore equilibrium. D) the quantity of real GDP demanded is less than the quantity of real GDP supplied. E) the quantity of real GDP demanded is greater than the quantity of real GDP supplied.
Using the data in the table above, if the price of a stapler is $5, then there is ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied
A) a surplus; is greater than B) a surplus; is less than C) a shortage; is greater than D) a shortage; is less than E) neither a surplus nor a shortage; equals
Demand is price inelastic if a relatively ________ price increase leads to a relatively ________ in the quantity demanded
A) large; small increase B) small; large decrease C) large; small decrease D) small; large increase
Inefficient outcomes can arise in markets for public goods because:
A) too much of an exclusive good is produced. B) too little of an exclusive good is produced. C) too much of a nonexclusive good is produced. D) too little of a nonexclusive good is produced.