If a U.S. firm produces cars in Mexico, that production should count towards
A) U.S. GNP.
B) Mexico's GNP.
C) U.S. GDP.
D) It will not affect either U.S. GNP or U.S. GDP.
Answer: A
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When government intervenes in the production process because external costs exist, it typically attempts to shift the industry's
A) demand curve to the right. B) demand curve to the left. C) supply curve to the right. D) supply curve to the left.
Discuss the dangers of inflation; that is, why may it hurt an economy?
More than one-third of the unemployed are recent entrants into the labor force
a. True b. False Indicate whether the statement is true or false
If a country experiences persistently low inflation, which of the following tends NOT to occur?
A) wage indexation will become less important B) nominal wages will be set for shorter periods of time C) the markup over labor costs will decrease D) all of the above