The International Monetary Fund lends money to countries to
A. finance their international transactions.
B. stabilize their exchange rates.
C. promote their economic development.
D. Both A and B are correct.
Answer: D
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A decrease in the costs of resources or inputs of production would shift the:
A) short-run aggregate supply curve rightward. B) short-run aggregate supply curve leftward. C) long-run aggregate supply curve rightward. D) long-run aggregate supply curve leftward.
Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concepts of advantage and trade, we can say that the opportunity cost of one pair of gloves is:
A. lower for the United States than Bangladesh, therefore the United States has a comparative advantage in glove production. B. higher for the United States than Bangladesh, therefore the United States has a comparative advantage in radish production. C. the same for both the United States and Bangladesh, therefore no comparative advantage exists. D. the same for both the United States and Bangladesh, therefore they both have the comparative advantage in glove production.
When demand is price-inelastic, ceteris paribus, an increase in
A. Price leads to greater total revenue. B. Total revenue indicates a reduction in price. C. Price leads to lower total revenue. D. Total revenue means quantity rises.
Which of the following statements is NOT true?
A) Economics is a social science. B) Economics is an empirical science. C) Economics does not use theories. D) Economics is the study of how people allocate their limited resources to satisfy their unlimited wants.