A U.S. bakery buys wheat from Canada and pays for it with US dollars. This transaction
a. increases Canadian net exports, and increases U.S. net capital outflow.
b. increases Canadian net exports, and decreases U.S. net capital outflow.
c. decreases Canadian net exports, and increases U.S. net capital outflow.
d. decreases Canadian net exports, and decreases U.S. net capital outflow.
b
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Everything else remaining unchanged, what is likely to happen to the equilibrium real interest rate and quantity of credit if the credit demand curve shifts to the right?
A) Both equilibrium rate of interest and quantity of credit will decrease. B) The equilibrium rate of interest will decrease and the quantity of credit will increase. C) Both equilibrium rate of interest and quantity of credit will increase. D) The equilibrium rate of interest will increase and the quantity of credit will decrease.
A perfectly competitive industry achieves allocative efficiency in the long run. What does allocative efficiency mean?
A) Each firm produces up to the point where the price of the good equals the marginal cost of producing the last unit. B) Each firm produces up to the point where all scale economies are exhausted. C) Production occurs at the lowest average total cost. D) Firms use an input combination that minimizes cost and maximizes output.