Refer to Figure 3.2. Which assumption concerning preferences do Alvin's indifference curves violate?
A) Diminishing marginal rates of substitution
B) Transitivity of preferences
C) More is preferred to less
D) Completeness
E) both A and C
E
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The terms of trade
a. equal the equilibrium price in a competitive market b. equal a nation's imports minus its exports c. determine whether specialization according to comparative advantage is economically rational d. are equal to 1.0 in market equilibrium e. determine how the gains from international trade are distributed among countries
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to rise and monetary base to remain the same. b. Demand for real goods and services to rise and M2 money supply to fall. c. Demand for real goods and services to remain the same and M2 money multiplier to remain the same. d. Demand for real goods and services to rise and M2 money supply to fall.