Perfect competition is an ideal market structure.
Answer the following statement true (T) or false (F)
True
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If a government raises its expenditures by $50 billion and at the same time levies a lump-sum tax of $50 billion, the net effect on the economy will be to
A. increase real GDP by $50 billion. B. increase real GDP by more than $50 billion. C. make no change in real GDP. D. increase real GDP by less than $50 billion.
Suppose Bank A holds $200 of reserves, has deposits of $1000, and the desired reserve ratio is 15 percent. How many loans can Bank A create at Bank A?
A) zero, because Bank A has no excess reserves B) $200 C) $50 D) $850
Janis mows the lawn in 1 hour and types a paper in 1 hour. Kristen mows the lawn in 2 hours and types a paper in 1 hour. Which of the following statements is true?
a. Kristen has an absolute advantage in typing and a comparative advantage in mowing. b. Janis has an absolute advantage in both activities and a comparative advantage in typing. c. Janis has an absolute advantage in both activities and a comparative advantage in mowing. d. The opportunity cost of mowing the lawn is greater for Kristen than it is for Janis. e. Neither Janis nor Kristen would gain from specialization.
An economics textbook is an example of:
a. capital. b. labor. c. a natural resource. d. entrepreneurship.