An open economy is one in which exports and imports constitute a large share of GDP.
Answer the following statement true (T) or false (F)
True
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If the annual inflation rate in an economy is negative, the purchasing power of a dollar:
A) will remain the same over time. B) will increase over time. C) will decrease over time. D) can increase or decrease depending on the nominal interest rate.
Suppose that some country had an adult population of about 25 million, a labor-force participation rate of 60 percent, and an unemployment rate of 6 percent. How many people were employed?
a. 0.9 million b. 14.1 million c. 15 million d. 23.5 million
Answer the following questions true (T) or false (F)
1. Consumers in monopolistically competitive markets face a trade-off between paying prices greater than marginal costs and purchasing products that are more closely suited to their tastes. 2. One way by which firms differentiate their products is to try to anticipate changes in consumer tastes and adapt their products to fit those changed tastes. 3. In the long-run equilibrium, a monopolistically competitive firm earning normal profit produces the allocatively efficient output level.
The idea that the business cycle is recurrent means that
A. declines in economic activity tend to be followed by further declines, and growth in economic activity tends to be followed by more growth. B. peaks and troughs of the business cycle occur at regular intervals. C. the standard pattern of contraction-trough-expansion-peak occurs again and again in industrial economies. D. many economic variables to move together in a predictable way over the business cycle.