When spending by the federal government exceeds net taxes, _____
a. the price level tends to fall
b. the money supply must fall
c. the aggregate demand curve shifts rightward
d. aggregate supply moves rightward
e. there is a federal budget surplus
Ans: c. the aggregate demand curve shifts rightward
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If a scale economy is the dominant technological factor defining or establishing comparative advantage, then the underlying facts explaining why a particular country dominates world markets in some product may be pure chance, or historical accident
Explain, and compare this with the answer you would give for the Heckscher-Ohlin model of comparative advantage.
If the price of used automobiles increased dramatically relative to all other prices, and the demand for all goods remained the same, which of the following would most likely occur?
a. The GDP price index would decrease less than the CPI. b. Both the GDP price index and the CPI would decrease. c. The GDP price index would increase more than the CPI. d. The CPI would increase more than the GDP price index. e. Both the GDP price index and the CPI would increase by the same amount.
Suppose the price of butter falls because milk price supports are removed. Will people's tastes shift away from margarine and toward butter?
Which of the following is NOT an example of a good with network economies?
A. Internet service B. A computer printer C. A cell phone D. Facebook