Assume goods X and Y are complements and are produced in perfectly competitive markets. All else constant, an increase in demand for good X would cause:
A) a decrease in the number of firms that produce good X.
B) an increase in the number of firms that produce good Y.
C) a decrease in the number of firms that produce good Y.
D) no effect on the number of firms that produce either good.
B
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Real business cycle proponents argue that
a. recessions are caused by movements of output away from the natural rate of output. b. prices and wages are sticky. c. macroeconomics should be based on the same assumptions as microeconomics. d. monetary policy is important in determining recessions. e. none of the above.
Assume that Country X and Country Y are trading partners and the exchange rates are fixed. If prices in Country Y fall, which of the following is expected to happen?
a. Country X will export more. b. Economy of Country X will be depressed. c. Net exports will rise for Country X. d. Country Y will import more.
Long-run economies of scale exist when the long-run average cost curve
a. rises. b. remains constant. c. falls. d. does not exist.
Good that cost one half dollar in the U.S. cost one euro in Germany, the real exchange rate would be computed as how many German goods per U.S. goods?
a. one half b. one half the price of the U.S. goods c. one half the number of euros it takes to buy a U.S. dollar d. None of the above is correct.