Economics is primarily the study of:
a. how choices are made in a world of scarcity
b. corporate balance sheets and income statements.
c. how to operate a business.
d. how to make money in the stock market.
a
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Which of the following statements is NOT true about inflation?
A. During an inflationary period, the prices of all goods will increase. B. During an inflationary period, the prices of some goods will increase while the price of some goods will decrease. C. When there is inflation, the purchasing power of a dollar decreases. D. Inflation is a sustained increase in the average prices of goods in the economy.
If a 5 percent increase in the price of good A leads to a 4 percent decrease in the demand for good B, then ________
A) the goods are substitutes B) only one good is a normal good C) the goods are complements D) both goods are normal goods
Suppose you are a U.S. exporter expecting to receive a payment of NZD1,000 (New Zealand dollars) in 12 months. The annual interest rate on NZD deposits is 5 percent, and the annual interest rate on dollar deposits is 9 percent. If the present exchange rate is $0.50 per NZD and interest rate parity holds, how many dollars do you expect to receive at the maturity date of the export contract?
a. $2,000 b. $1,923 c. $1,000 d. $580 e. $520
If the opportunity cost of production rises as more of a good is produced,
a. the terms of trade will be independent of opportunity costs b. the production possibilities curve will be a straight line c. a country will specialize in producing only those goods in which it has a comparative advantage d. a country should produce any good in which it has an absolute advantage e. a country may not specialize completely in the goods in which it has comparative advantage