Assume the total real output of a developing country increases from $8 billion to $8.2 billion while its population expands from 14 to 15 million people from one year to the next. Over the year, real GDP per capita has ________.
A. decreased by $25 per person
B. increased by $533 per person
C. decreased by $533 per person
D. increased by $25 per person
Answer: A
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When estimating incremental environmental costs, the survey approach
a. relies on expert knowledge about abatement technology b. is a more direct means of gathering abatement cost data than the engineering approach c. finds the level of abatement expenditures based on least-cost technology d. suffers from no inherent biases associated with polluting sources
Which of the following best explains the negative slope of the short-run Phillips curve?
A) Short-run aggregate supply increases at the same pace as aggregate demand increases so that inflation and unemployment do not change. B) Weak growth in aggregate demand keeps the economy below potential GDP, so unemployment rises but inflation falls. C) Aggregate demand grows so quickly that the inflation rate rises as unemployment rises. D) Long-run aggregate supply increases quickly enough that inflation falls as unemployment also falls.
Forces that cause long-run average cost to fall as output expands are known as
a. returns to scale. b. scale efficiencies. c. economies of scale. d. optimizing forces.
Variability in exchange rates of currencies used in international trade
A. causes a complete breakdown of trade. B. renders the theory of gains from trade null in practice. C. brings with it a host of complications in trade policy. D. has no impact on trade.