Positive economics looks at outcomes of economic behavior and evaluates them as good or bad.
Answer the following statement true (T) or false (F)
False
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If you are indifferent between investing $1000 for one year in a U.S. Treasury security that has an interest rate of 5% or in a Canadian government security that has an interest rate of 8%, you must be expecting
A) the inflation rate in the United States will be higher than the inflation rate in Canada during the year. B) the U.S. dollar to depreciate against the Canadian dollar by 3% during the year. C) the U.S. dollar to appreciate against the Canadian dollar by 3% during the year. D) productivity growth in Canada to be greater than productivity growth in the United States during the year.
If a firm's marginal cost curve is very steep in the short-term, but much flatter in the long-term, all else equal a ________-term forecast is likely to be more valuable than a ________-term forecast.
A) short; long B) long; extended C) short; extended D) long; short
Which of the following terms means that the country is a net lender abroad?
a. current account surplus b. current account deficit c. trade surplus d. trade deficit
A firm currently employs four workers in a sandwich shop, and produces sandwiches at a total cost per sandwich (ATC) of $3. The sandwiches sell for $5. If the marginal cost of hiring another worker to produce sandwiches is $5.50 per sandwich, then:
A. it will cost $5.50 to make another sandwich, which can only be sold for $5. B. the firm should not hire a fifth worker. C. the firm will lose $0.50 per sandwich if it hires another worker. D. All of these are true.