If ethanol production is expected to increase the price of corn, U.S. farmers will likely
A) shift the supply of corn to the left.
B) shift the supply of corn to the right.
C) reduce the production of corn by sliding down the corn supply curve, all else equal.
D) increase the production of corn by sliding up the corn supply curve, all else equal.
D
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The demonstration effect suggests that people will save less when they
A. control their spending in order to save more when the real interest rate increases. B. recognize that the real interest rate has increased. C. base their spending decisions (and consequently their saving decisions) on spending decisions of others who spend more than they do. D. base their saving decisions on their projections of income and spending needs over their lifetime.
When the marginal tax rate exceeds the average tax rate, the tax is
a. proportional. b. regressive. c. non-egalitarian. d. progressive.
According to the doctrine of purchasing-power parity, which of the following should depreciate if over the next year the inflation rate is higher in the U.S. than in the Euro area?
a. both the U.S. real exchange rate and the U.S. nominal exchange rate b. the U.S. real exchange rate, but not the U.S. nominal exchange rate c. the U.S. nominal exchange rate, but not the U.S. real exchange rate d. neither the U.S. nominal exchange rate nor the U.S. real exchange rate
When a nation's national saving falls short of its domestic investment, it must be
A) experiencing a government budget surplus. B) experiencing a government deficit. C) a net lender to foreign nations. D) a net borrower from foreign nations.