A recent study found that currency unions _____ bilateral trade by _____ compared with floating regimes.
A) increased; 90%
B) increased; 38%
C) decreased; 10%
D) decreased; 50%
Ans: B) increased; 38%
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A contractionary monetary policy can reduce real GDP if expectations are formed rationally and monetary policy is
A) combined with expansionary fiscal policy. B) carried out in total secrecy. C) publicly announced and credible. D) combined with contractionary fiscal policy.
The actual real wage must be below the equilibrium real wage in order to encourage firms to produce at any output level above the natural rate
Once workers realize this situation, their expected price level will gradually rise and they will demand a higher nominal wage. This description of a business cycle adjustment is part of which of the following theories? A) Classical model B) original Keynesian model C) Friedman fooling model D) the RBC model
Refer to the above figure. Profits for this firm will be maximized at
A) point B. B) point C. C) a quantity greater than point C. D) a quantity between points B and C.
Comparing proprietorships with partnerships, which is TRUE?
A) In both cases, profits are taxed only once. B) Partnerships outnumber proprietorships 2-to-1 in the United States. C) Proprietorships generally end with the death of the owner, but partnerships continue as long as at least one partner survives. D) A proprietor faces unlimited liability for her firm's debts, but in a partnership each partner is only responsible for an even share of the firm's indebtedness.