Economic growth will tend to be higher in a country that
a. has a low savings rate.
b. has an open economy that encourages the rapid spread of technology.
c. has an undeveloped system of property rights.
d. does not grant patents to investors.
Ans: b. has an open economy that encourages the rapid spread of technology.
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If the Federal Reserve raises its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts upward to the left; shifts to the right B. shifts downward to the right; shifts to the left C. shifts downward to the right; shifts to the right D. shifts upward to the left; shifts to the left
Specific tariffs are
A) import taxes stated in specific legal statutes. B) import taxes calculated as a fixed charge for each unit of imported goods. C) import taxes calculated as a fraction of the value of the imported goods. D) the same as import quotas. E) import taxes calculated based solely on the origin country.
For a perfectly competitive firm, marginal revenue is identical to marginal cost at every quantity
a. True b. False
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.