Figure 10-5
In Figure 10-5, which graph best illustrates the situation of an economy reacting to a recessionary gap by reducing resource cost levels?
a.
(1)
b.
(2)
c.
(3)
d.
(4)
a
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Suppose that the United States decided to subsidize a major research and development effort by U.S. firms in the semiconductor industry. Under the current rules of the WTO and GATT, the U.S. effort is
A) allowed as long as the subsidies are a small percent of the total cost. B) allowed as long as the subsidies do not involve a direct payment to the industry. C) not allowed. D) neither allowed nor disallowed. E) allowed as long as the subsidies are for developing a "precompetitive" technology.
As the Consumer Price Index increases, the value of money
a. falls, so people hold more money to buy the goods and services they want. b. falls, so people hold less money to buy the goods and services they want. c. rises, so people hold more money to buy the goods and services they want. d. rises, so people hold less money to buy the goods and services they want.