Consider a large open economy that has a zero current account balance
What are the effects on the world real interest rate, national saving, investment, and the current account balance in equilibrium if (a) future income rises? (b) business taxes decline? (c) government purchases decline? (d) the future marginal product of capital declines?
(a) rw rises, S falls, I falls, CA falls.
(b) rw rises, S rises, I rises, CA falls.
(c) rw falls, S rises, I rises, CA rises.
(d) rw falls, S falls, I falls, CA rises.
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You have invested $1,000 in a stock whose price is increasing at 10 percent a year. Your stock broker, who is never wrong, recommends a stock rising at 20 percent a year. Assuming the broker earns 4 percent of the stock’s value on any purchase or sale of the stock, should you take his or her recommendation?
What will be an ideal response?
If Jet Cruises chooses to No Ad, Easy Sail should ________ and earn ________ million in net profit.
Jet Cruises wants to prevent Easy Sail from entering the sailboat market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Jet Cruises and Easy Sail have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) Ad; $4 B) No Ad; $10 C) No Ad; $2 D) Ad; $10
If the government provides a subsidy in one industry and raises the tax revenue by taxing another industry, would, other things equal, cause welfare costs in both industries
a. True b. False Indicate whether the statement is true or false
From the standpoint of the economy as a whole, the role of insurance is to greatly reduce or eliminate the risks inherent in life
a. True b. False Indicate whether the statement is true or false