Assuming imperfect capital mobility and a fixed exchange rate, then an expansionary monetary policy
a. results in a balance of payments surplus without a conflict between domestic goals and external balance.
b. results in a balance of payments deficit with a potential conflict between domestic goals and external balance.
c. will shift the LM curve to the left.
d. will have no effect on the balance of payments.
B
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With a good on each axis, the production possibilities frontier is downward-sloping, which suggests
A) there is no limit to the amount of each good that can be produced. B) the production of one good ultimately means sacrificing production of the other. C) there are no opportunity costs of producing either of the goods. D) All of the above are true.
A market surplus occurs if the quantity:
A) demanded is greater than the quantity supplied. B) demanded is less than the quantity supplied. C) demanded is equal to the quantity supplied. D) supplied is less than the quantity demanded.
Labeling that states that a product was produced under environmentally sustainable conditions may not be an effective way to reduce pollution if
A) producers do not apply labels. B) labeling increases costs. C) consumers do not believe the information on the label. D) governments require labels.
The price-elasticity coefficients are 2.6, 0.5, 1.4, and 0.18 for four different demand schedules D1, D2, D3, and D4, respectively. A 2 percent increase in price will result in an increase in total revenues in which of the following cases:
A. D1 and D3 B. D1 and D4 C. D2 and D4 D. D1, D2, and D3