For a country with a fixed exchange rate, a monetary shock will have a smaller impact on the domestic economy than will a comparable domestic spending shock.
Answer the following statement true (T) or false (F)
True
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An example of a market subject to adverse selection would be:
A. the used car market. B. the insurance market. C. the financial market. D. All of these statements are true.
When can a country gain a price advantage on imports by imposing a tariff?
a. when it is the largest country with absolute advantage in all goods b. when it has a comparative advantage in the production of all goods c. when it can do so without other countries retaliating with tariffs d. when trade agreements prohibit quotas but permit tariffs
During times of high unemployment, colleges often observe an increase in enrollment even if tuition remains unchanged. Why?
A. Students go to college even when the net benefit is negative. B. The opportunity cost of attending college is higher when unemployment is high. C. The benefit of attending college is lower because college graduates are less likely to find jobs. D. The opportunity cost of attending college is lower when unemployment is high.
Government policy to reduce unemployment and increase national output can be illustrated by an
A. outward shift of the aggregate demand curve caused by an increase in government spending. B. outward shift of the aggregate supply curve caused by a reduction in government spending. C. inward shift of the aggregate demand curve caused by an increase in government spending. D. inward shift of the aggregate supply curve caused by a reduction in government spending.