After World War II, the United States has pursued a broad policy of
A) strengthening "Fortress America" protectionism.
B) removing barriers to international trade.
C) isolating Iran and other members of the "axis of evil."
D) protecting the U.S. from the economic impact of oil producers.
E) restricting trade of manufactured goods.
B
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In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes
a. compensating differentials. b. the increased recognition that a larger stock of human capital usually leads to higher earnings. c. technological progress. d. the decreasing importance of international trade.
The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:
A. it is a bad decision because the chances of a child dying (less than one per year) are so small that they can be ignored. B. we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation. C. it fails because it should take effect immediately, not after four years. D. it is a good decision because the benefits exceed the costs.
Use the following table to answer the next question.The table shows a consumption schedule. All figures are in billions of dollars.RGDPConsumption$600$580640610680640720670760700If gross investment was $20 billion, government purchases of goods and services were $20 billion, and taxes and net exports were zero, then the equilibrium level of real GDP would be
A. $680 billion. B. $720 billion. C. $600 billion. D. $640 billion.
Which kind of risk affects the opportunity cost of capital?
A) Nondiversifiable risk B) Diversifiable risk C) Both nondiversifiable and diversifiable risk D) The risk inherent in "riskless" assets such as U.S. Treasury bills E) The risk inherent in "riskless" portfolios such as broad stock market holdings