Are federal budget deficits related to trade deficits?
A. Yes. Higher deficit spending goes up resulting in more government borrowing, and foreign residents who lend funds to the U.S. government have fewer resources to spend U.S. export goods.
B. No. The budget deficit is entirely a domestic matter, while the trade deficit only affects U.S. citizens who travel abroad.
C. Yes. If U.S. consumers buy too many imported goods, they do not have funds to save, and a budget deficit results.
D. Yes, but only if the quality of U.S. goods and services is deteriorating.
Answer: A
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Demand in a perfectly competitive market is Q = 100 - P. Supply in that market is Q = P - 10. What is the market equilibrium price and quantity? Given that price and quantity, how much consumer surplus, producer surplus, and deadweight loss is there? If the government imposes a $40 price ceiling, what quantity will be produced and sold? Assuming that those who value the good the most actually get after the ceiling is imposed, how much consumer surplus, producer surplus, and dead-weight loss is there?
What will be an ideal response?
Use the following graph to answer the next question.
All else held constant, higher inflation in the United States relative to that in Canada will cause a(n) ________.
A. decrease in the supply of U.S. dollars B. decrease in the value of the U.S. dollar in terms of the Canadian dollar C. increase in the value of the U.S. dollar in terms of the Canadian dollar D. increase in the demand for U.S. dollars
A bakery producing bread reports the following production information:
# Workers Total Product (loaves of bread per hour) 0 0 1 35 2 65 3 85 4 100 5 110 The bread sells in a competitive market at a price of $0.30 each. The firm hires workers in a competitive labor market at a wage of $7 per hour. How many workers should the firm hire? Explain your answer.
The utility associated with the payoffs in a risky situation increases ____________ than the dollar value of these payoffs
Fill in the blank(s) with the appropriate word(s).