Suppose that there is a balance of trade in both the United States and Canada. Then, the U.S. dollar appreciates against the Canadian dollar. What would the likely outcome be?
(A) A trade deficit in both countries.
(B) A trade surplus in the United States.
(C) A trade deficit in Canada.
(D) A trade surplus in Canada.
Ans: (D) A trade surplus in Canada.
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While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect
a. True b. False Indicate whether the statement is true or false
A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. Now suppose that the country in which this monopolist is located decides to engage in international trade. The world price of the product produced by the monopolist is $12. What is the monopolist's profit-maximizing output level?
a. 5 b. 6 c. 7 d. 8
Why does the government place price ceilings, such as rent control, on some "essential" goods?
A. to lower demand for there goods B. to keep people from starting new buisness C. to keep the goods from becoming too expensive D. to encourage businesses to produce more
Suppose country A pegs its nominal exchange rate to country B and that country A has a higher inflation rate than country B. In this situation, country A will experience
A) a real appreciation. B) a worsening trade position. C) an increase in the real exchange rate. D) all of the above E) none of the above