During the 1990s, which of the following did NOT occur? A) Private savings fell. B) Investment rose. C) Public savings increased. D) The United States received capital inflows. E) Private savings was greater than investment for most of the 1990s. ANSWER E
Date: September 10th, 2020
The single currency project in the EU will be most successful if European labor is relatively A) immobile. B) immobile and business cycles are not synchronized. C) mobile and business cycles are synchronized. D) mobile and business cycles are not synchronized. E) mobile. ANSWER C
Date: September 10th, 2020
The European Union became an economic union with the implementation of which treaty? A) Treaty of Rome B) Single Europe Treaty C) Delor’s Agreement D) Treaty on European Union E) Schengen Agreement ANSWER D
Date: September 10th, 2020
The HO model predicts that once trade begins factor prices will equalize between countries. This result occurs because of the assumption of A) identical technology sets available to each country. B) constant opportunity costs. C) one factor of production. D) free international mobility of factors. ANSWER A
Date: September 10th, 2020
Which of the following is false? A) International differences in tastes, if sufficiently large, could overturn the comparative advantage predictions of the HO model. B) The classical and HO models make similar assumptions about international differences in technology. C) The HO model predicts that some groups will be hurt by international trade. D) Both the […]
Date: September 10th, 2020
If a firm increases its output in the ________ and unit costs ________, then the firm is experiencing ________ of scale. A) long-run; decrease; economies B) short-run; decrease; economies C) long-run; decrease; diseconomies D) short-run; decrease; diseconomies E) long-run; increase; economies ANSWER A
Date: September 10th, 2020
As a candidate for president of the United States, Barak Obama was an ardent supporter of outsourcing. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The Ricardian model attributes the gains from trade associated with the principle of comparative advantage result to A) differences in technology. B) differences in preferences. C) differences in labor productivity. D) differences in resources. E) gravity relationships among countries. ANSWER C
Date: September 10th, 2020
Which of the following is NOT true about the national income identity given by the equation: A) If CA is positive, national saving finances the purchase of our goods by foreign users. B) If CA is negative, our investment exceeds our national savings. C) A negative CA may imply that foreigners have confidence in the […]
Date: September 10th, 2020
One drawback to a single currency is that A) the exchange rate is more volatile. B) bond markets are larger and therefore harder to control. C) exporters and importers have fewer choices about how they will receive and make payments. D) individual nations cannot use monetary policy to stabilize the economy. E) foreign currency is […]
Date: September 10th, 2020
