The BP schedule shows the combinations of the interest rate and income
a. that clear the goods market.
b. that leads to equilibrium in the balance of payments.
c. that equate supply and demand in the foreign exchange market at a given exchange rate.
d. and is always positively sloped.
e. both b and d.
E
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Tony's Italian Ice is a monopolistically competitive firm. If Tony's earns a profit in the short run, which of the following is most likely to occur?
A) New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the right. B) New firms that sell Italian ice will enter the market and Tony's demand curve will become more inelastic. C) New firms that sell Italian ice will enter the market and Tony's cost curves will shift to the left. D) New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the left.
Since World War II, world trade has
A) decreased in importance as nations turn inward due to security concerns. B) increased, but not as dramatically as annual world real GDP has climbed. C) risen sharply, outpacing gains in annual world real GDP. D) increased in relative importance for most nations, but not for the United States.
NOW (negotiable order of withdrawal) accounts
A. are really just interest-bearing checking accounts under a different name. B. cannot earn interest. C. can only be issued by commercial banks. D. can be issued by most insurance companies and real estate agencies.
Related to the Economics in Practice on page 155: You own a truck and use it to deliver merchandise to retailers and hire a driver to make such deliveries. The speed at which you instruct the driver to drive depends on
A. neither the driver's wage nor the price of gasoline. B. the driver's wage and the price of gasoline. C. the driver's wage only. D. the price of gasoline only.