A constant-cost industry is more likely to arise in a market where:
A. the industry takes only a small portion of the resources available.
B. the industry takes only a large portion of the resources available.
C. inputs have very different levels of quality.
D. firms have large fixed costs and small marginal costs.
Answer: A
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Economists argue for free trade in import markets because
A) all consumers and producers benefit from importing goods. B) the gains to the U.S. producers outweigh the losses to the U.S. consumers. C) the gains to the U.S. consumers outweigh the losses to the U.S. producers. D) no one is made worse off by importing goods. E) importing goods decreases total surplus.
According to monetarists, such as Milton Friedman ________
A) the central bank should have discretionary authority to respond to economic problems that develop over the course of the business cycle B) the Taylor rule should effectively address the problem of inflation C) an increase in government spending has substantially the same effects as an unanticipated increase in the money supply on domestic interest rates D) the money supply should grow at a constant rate regardless of the state of the economy
When the international financial system operated under the gold standard,
a. the currencies of most countries were convertible into gold b. all international transactions were financed with gold c. the price of gold was determined by the supply and demand for foreign exchange d. the quantity of money demanded was always the same e. there was very little inflation
Political business cycles which are the results of economic fluctuations that occur when discretionary policy is manipulated for political gain
Indicate whether the statement is true or false