A bridge built by the government of Nepal collapsed in the same year it was constructed. If the total cost of building the bridge was $4 million, which of the following will happen as a result of its collapse?
A) GDP will decrease.
B) GDP will remain unchanged.
C) Nepal's trade deficit will increase.
D) Nepal's trade surplus will increase.
Answer: B) GDP will remain unchanged.
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Mark loves ice cream. At any point in time, he will buy an additional ice cream cone if
A) the marginal benefit from it exceeds the price. B) the marginal benefit from it is zero. C) his willingness to pay is less than the price. D) there is no deadweight loss produced by his purchase of a cone. E) None of the above answers is correct.
If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________
A) fall; falls B) do not change; rises C) fall; does not change D) fall; rises E) do not change; falls
Economists refer a to a market where buying and selling take place at prices that violate government price regulations as
A) a noncompetitive market. B) an outlaw market. C) a black market. D) a restricted market.
Which of the following is most likely to increase long-run aggregate supply in an economy?
a. A decrease in the size of the labor force b. A deterioration in the quality of the labor force c. A reduction in the cost of using computers d. An increase in the price level e. An increase in aggregate demand