The ratio at which nations will exchange one product for another is known as the
A. terms of trade.
B. exchange rate.
C. discount rate.
D. balance of trade.
Answer: A
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Which of the following statements is FALSE?
A) Both monetary and interest rate targets cannot be pursued simultaneously. B) A reduction in the required reserve ratio increases the money supply and pushes down the equilibrium interest rate. C) An open market sale decreases the money supply and pushes up the equilibrium interest rate. D) An open market purchase reduces the money supply and pushes down the equilibrium interest rate.
If total utility is falling, marginal utility is:
a. positive. b. negative c. positive, but declining. d. either positive or negative. e. zero.
A decrease in the price of a good enhances the consumer's purchasing power. The income effect applies to both normal and inferior goods by encouraging the consumer to purchase more
a. True b. False
Supply-side economic policies are best viewed as
a. a short-run countercyclical tool. b. a long-run strategy to promote economic growth. c. a strategy for the control of long-run inflation. d. a stabilization tool to smooth the ups and downs of the business cycle.