When the supply curve of a resource is vertical, then the return to the resource owner is
A. pure economic rent.
B. partly economic rent and partly opportunity costs.
C. partly economic rent and partly profits.
D. zero.
Answer: A
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Which of the following does NOT appear in the current account part of the balance of payments?
A) a loan of $1 million from Bank of America to Brazil B) foreign aid to El Salvador C) an Air France ticket bought by an American D) income earned by General Motors from its plants abroad
In what way do policy makers have to face a trade-off between inflation and unemployment?
a. The cost of reducing inflation by restrictive fiscal and monetary policies is a temporary increase in unemployment. b. The cost of reducing inflation by restrictive fiscal and monetary policies is a permanent increase in unemployment. c. The cost of reducing unemployment by expansionary fiscal and monetary policies is virtually nonexistent. d. The cost of reducing unemployment by expansionary fiscal and monetary policies involves higher inflation during recessions.