If government increases its purchases by $20 billion and the MPC = 0.9, the resulting increase in the consumption component of AD is:
a. $2 billion
b. $18 billion.
c. $180 billion.
d. $200 billion.
c
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Assume that by devoting all of its resources to the production of X, nation Alpha can produce 40 units of X. By devoting all of its resources to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y. We can conclude that
A. Alpha should specialize in Y and Beta in X. B. the terms of trade will be 3X equals 1Y. C. Alpha should specialize in X and Beta in Y. D. there is no basis for mutually beneficial specialization and trade.
Capital is a factor of production. An example of capital as a factor of production is
A) machines. B) education. C) stocks. D) money. E) bonds.
Refer to the scenario above. Which of the following is true in this case?
A) Firm A's dominant strategy is to choose Strategy X. B) Firm B's dominant strategy is to choose Strategy Y. C) Firm A chooses Strategy X if Firm B chooses Strategy Y. D) Firm A chooses Strategy Y if Firm B chooses Strategy Y.
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were to open to trade, domestic producers would:
A. transfer surplus in area BCD to foreign producers. B. transfer surplus in area BC to consumers. C. receive additional surplus of BCD. D. lose surplus in area BCD to foreign consumers.