To analyze intra-industry trade, we must bring in imperfect competition, and we change our assumptions about our trade models to allow:
a. price-conscious consumers.
b. short-run unemployment.
c. differentiated products.
d. perfect competition.
Ans: c. differentiated products.
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In a perfectly competitive market with identical firms, all surplus will be consumer surplus in long run equilibrium.
Answer the following statement true (T) or false (F)
In terms of purchasing power parity, the nation with the highest per capita GDP is
a. Japan. b. Norway. c. Switzerland. d. the United States.
If government spending increased by $50 billion and the MPC within the economy was 0.8, what would be the total impact on real GDP?
a. $62.5 billion decrease b. $62.5 billion increase c. $250 billion decrease d. $250 billion increase
By driving up interest rates, an increase in investment spending causes
a. a voluntary decrease in consumption b. a voluntary increase in consumption c. an involuntary decrease in consumption d. an involuntary increase in consumption e. government spending to be crowded out