At which time is the opportunity cost likely to be higher to go to war, during a recession or during an economic boom? Explain your answer fully
What will be an ideal response?
It is likely that going to war during an economic boom is more costly because many men and women who join the military or are drafted will more than likely be leaving behind a productive job. The rest of the country will experience a permanent sacrifice in terms of all the goods and services that will not be produced by them. During a recession many men and women are without jobs so the opportunity cost of deploying them in war is lower.
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A shift in tastes toward American goods ________ net exports in the U.S. and causes the quantity of aggregate output demanded to ________ in the U.S., everything else held constant
A) decreases; rise B) decreases; fall C) increases; rise D) increases; fall
An optimum currency area is a geographic region
A) with inflation near zero. B) that allows exchange rates to float. C) that has fixed exchange rates. D) for which the benefits of having a common currency exceed the costs.