The persistent U.S. trade deficit with Japan is
a. surprising because one would expect that bilateral trade between two countries with flexible exchange rates would be in balance.
b. surprising because the Japanese are high cost producers of many goods that are purchased in large quantities by U.S. consumers.
c. not surprising because there is no reason why bilateral trade between two countries should be in balance.
d. proof that the trade practices of the Japanese are unfair toward the United States.
C
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Which of the following statements is TRUE?
A) The infant-industry argument is valid only if the benefits of learning-by-doing in the infant industry spill over to other parts of the economy. B) A subsidy to an infant industry is a more efficient way to protect it from foreign competition than a tariff on the competing foreign goods. C) Both statements are true. D) Neither of the statements is true.
There are no idle resources, the multiplier is operative, and autonomous spending rises. It follows that
A) Real GDP will not increase. B) Real GDP will rise. C) prices will rise. D) a and c E) a, b, and c
Assume MACROSOFT is planning to develop and sell a new word processor. It estimates that R&D expenses will amount to $300,000 for this new software, and it will have to invest an additional $150,000 to advertise and distribute the new product. If MACROSOFT's managers are risk-neutral, they will undertake this project if the expected revenues from the sales of the new software are
A. at least $300,000. B. at least $450,000. C. at least $150,000. D. at least $100,000.
The value of the films starring Charlie Chaplin produced in the United States that still exist will not be included in this year's U.S. gross domestic product (GDP) because: a. Charlie Chaplin was not an American citizen
b. Charlie Chaplin did not make the films this year. c. the films earn less revenue. d. the films no longer have any value except to collectors. e. films are intermediate goods.