Describe the situation in the market for a good or service that the United States imports
What will be an ideal response?
The goods and services the United States will import are those in which the United States has a higher opportunity cost of production relative to other countries. In those markets the U.S. no-trade price is higher than the world price. With trade the quantity produced in the United States is less than the quantity consumed and the difference is imported.
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In the figure above, if the interest rate is 6 percent
A) there is a $0.1 trillion excess quantity of money and the interest rate will rise. B) there is a $0.1 trillion excess quantity of money and the interest rate will fall. C) the money market is in equilibrium and the interest rate will remain constant. D) there is a $0.1 trillion excess demand for money and the interest rate will rise.
The concept of "economic pessimism" stems from
A) the theory and empirical fact which states that developing nations face declining export prices relative to increasing import prices. B) the fact that economic growth in an era of globalization is difficult to attain. C) the fact that smaller countries would not enjoy comparative advantage unless they are allowed to subsidize some of their industries. D) the fact that it is impossible to achieve desired economic development without adopting full democratic principles. E) None of the above.