Planned aggregate expenditure in an open economy equals
A. C + I + G + EX + IM.
B. C + I + G + EX - IM.
C. C + I + G - IM.
D. C + I + G + EX.
Answer: B
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Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, the firm will experience
A) increasing returns to scale. B) constant returns to scale. C) decreasing returns to scale. D) The returns to scale cannot be determined from the information provided.
Suppose 10% of all workers are of high ability. If a firm knows a worker's ability, workers of low ability are paid $20,000 and workers of high ability are paid $30,000. A college degree can signal ability, and the cost of the degree is $11,000. Will there be a pooling equilibrium or a separating equilibrium?
What will be an ideal response?
In spite of having no natural resources, a country like _____ was able to make itself one of the wealthiest countries in the world because it allowed private ownership
a. India b. Poland c. Hungary d. Hong Kong e. China
The lemons problem gives the owners of above-average-quality used cars an incentive to:
A. offer a warranty when selling their cars. B. exaggerate the quality of their cars when selling them. C. ask for a sales price that is higher than the blue book value of their car. D. understate the true quality of their cars when selling them.