In the model of monopolistic competition, compared to a firm with a lower marginal cost, a firm with a higher marginal cost will set a ________ price, produce ________ output, and earn ________ profits. A) higher; less; less B) lower; more; more C) higher; more; more D) lower; less; less E) higher; less; more […]
Date: September 10th, 2020
Most currency trades in London do not involve the British pound. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
If countries have similar factor endowments and productivities, their trade is likely to be interindustry. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
According to the human skills theory A) trade patterns depend upon a country’s relative endowment of skilled workers. B) countries with large endowments of skilled labor will have comparative advantage in skilled labor intensive products. C) the Leontief paradox is explained by the fact that the United States is relatively skilled labor abundant. D) All […]
Date: September 10th, 2020
A system of managed floating exchange rates is A) a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. B) a system in which governments use flexible exchange rates. C) a system in which governments are forbidden from attempt to moderate exchange rate movements without keeping exchange […]
Date: September 10th, 2020
If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at ? Please explain. What will be an ideal response? ANSWER No, the rise in output leads to an excess demand for money. If the central bank […]
Date: September 10th, 2020
If the United States’ production possibility frontier was flatter to the widget axis, whereas Germany’s was flatter to the butter axis, we know that A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) the U.S. has a comparative advantage in butter. D) Germany has comparative advantages in […]
Date: September 10th, 2020
The first phase of a typical cycle of economic populism is usually A) hyperinflation. B) rising growth and rising wages. C) falling growth and falling wages. D) rising unemployment. E) severe disinflation. ANSWER B
Date: September 10th, 2020
The goal of international economic policy cooperation is to allow for greater flexibility in exchange rates. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Low wages and poor working conditions in many U.S. trade partners A) prove that the gains-from-trade arguments of the Ricardian model are false. B) may be a fact of life, but economists don’t care. C) are facts emphasized by U.S. labor in its contract negotiations. D) prove that the gains-from-trade arguments of the Ricardian model […]
Date: September 10th, 2020
