Raul Prebisch's objection to having developing countries treat trade as the "engine of growth" was that
a. agricultural goods were becoming cheaper while industrial products were becoming more expensive
b. industrial products were being substituted for primary products
c. workers in poor countries had little bargaining power, while unions in rich countries pushed wages up
d. agricultural products were becoming a smaller portion of peoples' budgets as income rose
e. all of the above
E
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Consider a perfectly competitive firm for which MC equals ATC at the $10 level. If the market price is $10,
a. the firm can earn an economic profit. b. the firm will suffer an economic loss but should operate in the short run. c. the best the firm can do is to break even. d. the firm should shut down in the short run.
Use the sticky-wage theory of aggregate demand to explain the short-run Phillips curve
If a teacher tells a student that those who attend the study session typically score higher on the final exam
A) the student has a positive incentive to attend the study session because she may get a higher grade. B) the student has a negative incentive to attend the study session because she will be punished if she does not go. C) the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam. D) a "C" student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go.
Forward commitment by the Fed has which of the following impacts?
A. Forward commitment encourages lending because banks do not fear that the Fed will suddenly reverse the policy. B. Forward commitment encourages excessive lending as banks try to take control of as many reserves as possible before the policy is exhausted. C. Forward commitment eliminates all flexibility in monetary policy. D. Forward commitment creates moral hazard in lending, as banks know that the Fed will continue to pump reserves into the system.