In the figure above, if the market price is $12, then the total consumer surplus is
A) $12.
B) $10.
C) minimized.
D) $240.
E) $480.
D
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Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and GDP Price Index falls. b. The real risk-free interest rate rises, and GDP Price Index falls. c. The real risk-free interest rate and GDP Price Index remain the same. d. The real risk-free interest rate falls, and GDP Price Index remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
The increase in the interest rate due to a higher expected inflation rate is called the __________ effect
A) expectations B) Fisher C) liquidity D) income E) a or b
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
Political factors influence international trade because
A. foreign trade always involves at least two governments. B. foreign governments are much less concerned with the welfare of citizens in other countries. C. foreign governments often establish impediments to free international trade. D. All of the above are correct.