Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost of one pair of shoes for the United States is ________, while the opportunity cost of one pair of shoes for Canada is ________.
A. 5 apples; 2 apples
B. 2,000 apples; 200 apples
C. 1/5 apple; ½ apple
D. 100 apples; 20 apples
Answer: A
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If a country pegs its currency to a foreign currency, it no longer has the ability to use monetary policy to stabilize the economy because:
A. monetary policy must be used to keep the exchange rate's market equilibrium value at its official value. B. banks will begin to hold 100% of their deposits in reserves. C. it must eliminate its currency from circulation and replace it with the foreign currency. D. it no longer has a central bank.
In the United States over the past fifty years, the fraction of GNP devoted to consumption has fluctuated in a range of about
A) 42 to 49 percent. B) 32 to 39 percent. C) 22 to 29 percent. D) 82 to 89 percent. E) 62 to 70 percent.
The “invisible hand” refers to the control that government must exercise over a market economy.
Answer the following statement true (T) or false (F)
To maintain a balanced budget during the sag in personal spending in 2008 could cause a
a. further increase in aggregate demand and inflation. b. further increase in aggregate demand and unemployment. c. further decrease in aggregate demand and a recession. d. further decrease in aggregate demand and inflation.