"International trade bestows benefits on countries through the international transmission of ideas." Do you agree or disagree? Explain
What will be an ideal response?
Agree. Ideas developed in one place can be transferred to other places, benefiting people in both places. Often the idea is originally embodied in goods, but eventually the idea itself usually gets transferred as well.
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Suppose there is an oil supply shock to the U.S. economy due to an embargo by major oil producing nations. According to the real business cycle theory, the supply shock will, other things being equal
A) cause economy-wide deflation. B) cause real Gross Domestic Product (GDP) to decline both in the short run and in the long run. C) push the economy into an expansionary phase of the business cycle. D) push real Gross Domestic Product (GDP) upward in the short run but downward in the long run.
Mexico City is notorious for its excessive pollution. Mexico's measure of GDP is
A) increased by the estimated value of the pollution's harm. B) not affected by the estimated value of the pollution's harm. C) changed by the pollution only when comparing its GDP with the U.S. GDP. D) decreased by the estimated value of the pollution's harm. E) None of the above answers is correct.
In the figure above, what is the slope of the curve at point A?
A) 0.75 B) -0.75 C) 1.33 D) -1.33 E) zero
Compared to the United States, Japan's experience with monetary targeting during the 1978––1987 period performed
A) better with regard to the inflation rate and output fluctuations. B) worse with regard to the inflation rate and output fluctuations. C) better with regard to the inflation rate, but worse with regard to output fluctuations. D) worse with regard to the inflation rate, but better with regard to output fluctuations.