Bananas in the European Union often retail for twice more than they do in the U.S. What is the most likely explanation for this fact?
A) A complicated system of tariffs and quotas that the EU has imposed to control the imports of bananas.
B) More significant freight costs to ship bananas from Central America.
C) Larger markup by European retailers.
D) None of the above.
A
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Which one of the following will not cause the production possibilities curve to shift outward?
a. improvements in the stock of land b. increased educational opportunities c. a very low birth rate d. increased entrepreneurial activity
Under the adaptive expectations hypothesis, which of the following is the most likely long-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output b. higher prices and expansion in real output c. no change in prices but an expansion in real output d. no change in either prices or real output