If Japan and the United States engage in trade, and Japan gains as a result of the trade, does that mean the United States has lost in some manner?
What will be an ideal response?
If economic agents engage in voluntary trade, then neither party has been made worse off, and at least one of them has been made better off. Voluntary trade, by definition, is not coercive, and an economist would not expect someone to trade in the expectation of becoming worse off. Instead, economists would expect both parties to gain—although the gains may not be equal in size. So, in this case, the United States would not have lost in some way.
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According to the special interest theory, the licensing of beauticians would be
a. desired by consumers in order to promote the public interest b. desired by beauticians in order to promote the public interest c. discouraged by all beauty salons, large or small d. desired by some beauticians in order to restrict entry into their profession e. done strictly at the initiative of the government
Suppose the Fed announced a policy of rapid growth in the money supply in 2004, but then put the brakes on money expansion without any announcement. If in 2005, Fed officials announce again that an expansion is planned, it is most likely that:
a. people will believe in the announcement since the conditions that created a need for the expansion are probably still in effect. b. people will believe in the announcement since they consider that having failed to implement the expansion previously, the Fed still plans to do so. c. people will not believe in the announcement since they consider that the conditions that created a need for the expansion must have changed in the meantime. d. people will not believe in the announcement since they consider that having failed to implement the expansion previously, the Fed will probably fail again e. there will be further uncertainty about the Fed following through on the policies it announces.
Which of the following products is most likely to be produced by a perfectly competitive firm?
a. color televisions b. breakfast cereal c. legal services d. corn e. notebook computers
If an investor starts with dollars and wants to end up with dollars in the future, which of the following is NOT an investment choice that he can make?
A. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and then, buy dollars at the future spot rate B. Buy a dollar-denominated financial asset C. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy the foreign currency D. Sell dollars at the spot rate, invest the proceeds in foreign currency-denominated financial instruments, and sign a forward exchange contract to buy dollars