An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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The balance of payments accounts record all of the following EXCEPT the country's
A) domestic investment. B) international lending. C) international borrowing. D) change in official reserves. E) international trading.
In the money market, if the quantity of money supplied exceeds the quantity of money demanded, the nominal interest rate will ________ and the prices of assets will ________
A) fall; increase B) rise; increase C) fall; decrease D) rise; decrease E) fall; not change
The consumer is in equilibrium when
A) MRT = MRS. B) Px/Py = MUx/MUy C) the budget line is tangent to the indifference curve at the bundle chosen. D) All of the above.
If the opportunity cost of producing corn is lower for Ohio than for Iowa, then:
A. Iowa should specialize in corn production. B. Iowa has the comparative advantage in corn production. C. Iowa should export corn to Ohio. D. Ohio has the comparative advantage in corn production.