In the shortrun (specific factors) model, FDI will cause _______________ in the return to capital and land and _______________ in the return to labor in the recipient country.
a. an increase; a decrease
b. a decrease; an increase
c. no change; an increase
d. a decrease; no change
Answer: b. a decrease; an increase
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The rate at which nations will exchange goods and services is known as the
A) exchange rate. B) transfer rate. C) terms of exchange. D) terms of trade.
Both the long-run and the short-run Phillips curves shift if
A) the expected inflation rate changes. B) the expected unemployment rate changes. C) the natural unemployment rate changes. D) expected real GDP changes. E) the actual inflation rate changes.
"Take thou no usury of him, or increase, but fear thy God, that thy brother may live with thee" (Leviticus 25:36). Thus biblical instruction was the foundation for usury laws, both ancient and modern, and to an economist represent an early example of
a. price floors b. price ceilings c. target prices d. deficiency payments e. market-determined prices
Figure 14.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. Initially buyers believe that 50% of used refrigerators in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer refrigerators are sold in equilibrium?
A. 50 B. 125 C. 175 D. 250