Suppose there are only 2 nations, Atlantis and Pacifica, and only two goods, surfboards and kayaks. If Atlantis produces only surfboards, it can make 50 per day. If Atlantis produces only kayaks, it can make 75 per day
If Pacifica produces only surfboards, it can make 75 per day. If Pacifica produces only kayaks, it can make 75 per day. After trade begins, ________ will specialize in the production of surfboards and ________ will specialize in the production of kayaks.
A) Atlantis; Pacifica B) Pacifica; Atlantis C) Atlantis; Atlantis D) Pacifica; Pacifica
B
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The cost of holding money balances increases when
a. the purchasing power of money rises. b. the money interest rate increases. c. the price of goods and services falls. d. consumer income expands.
Tanesha sells homemade candles over the Internet. Her annual revenue is $64,000 per year, the explicit costs of her business are $17,000, and the opportunity costs of her business are $22,000. What is her economic profit?
A) $17,000 B) $25,000 C) $42,000 D) $47,000
Automatic stabilizers are fiscal policy measures that
A) must be determined by the Congress in each budget. B) do not require new legislation. C) are determined by the Federal Reserve System. D) are part of discretionary fiscal policy.
A floating exchange rate
a. is determined by the national governments involved b. remains extremely stable over long periods of time c. is determined by the actions of central banks d. is allowed to vary only within a narrow range e. adjusts in response to market forces