Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ?

Related Mcqs:

1. Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land Note that wages are the returns to labor and rents are the returns to land According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B: A. wages and rents should fall in Country A B. wages and rents should rise in Country A C. wages should rise and rents should fall in Country A D. wages should fall and rents should raise in Country A ?

   XA. wages and rents should fall in Country A
   B. wages and rents should rise in Country A
   C. wages should rise and rents should fall in Country A
   D. wages should fall and rents should raise in Country A

2. Suppose a frost destroys much of the Florida orange crop. At the same time, suppose consumer tastes shift toward orange juice, What would we expect to happen to the equilibrium price and quantity in the market for orange juice ?

   A. price will decrease, quantity is ambiguous
   B. The impact on both price and quantity is ambiguous.
   C. Price will increase, quantity will increase
   D. price will increase, quantity will decrease
   E. price will increase, quantity is ambiguous.

3. Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output rises; prices are unchanged from the initial value
   B. Output and the price level are unchanged from their initial values
   C. Output falls; prices are unchanged from the initial value
   D. Prices fall; output is unchanged from its initial value

4. Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?

   A. X to point Y
   B. X to point Z
   C. Y to point X
   D. Z to point X

5. Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?

   A. Z to point X
   B. X to point X
   C. X to point Z
   D. Y to point X

6. Suppose both buyers and sellers of wheat expect the price of wheat to rise in the near future. What would we expect to happen to the equilibrium price and quantity in the market for wheat today ?

   A. The impact on both price and quantity is ambiguous
   B. Price will decrease, quantity is ambiguous.
   C. price will increase, quantity will decrease
   D. price will increase, quantity is ambiguous.
   E. Price will increase, quantity will increase

7. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output falls; prices are unchanged from the initial value
   B. Price fall; output is unchanged from its initial value
   C. Output and the price level are unchanged from their initial values
   D. Prices rise; output is unchanged from its initial value

8. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?

   A. Price fall; output rises
   B. Price fall; output falls
   C. Price rise; output fall
   D. Price rise; output rise

9. Suppose the economy is initially is long run equilibrium Then suppose there is a drought that destroys much of the wheat crop According to the model of aggregate demand and aggregate supply, what happens of prices and output in the short run ?

   A. Price rise; output falls
   B. Price fall; output rises
   C. Price rise; output rises
   D. Price fall; output falls

10. Under floating exchange rates, expectations of higher interest rates are likely to cause an ____ of the exchange rate?

    A. depreciation
    B. appreciation
    C. fall
    D. devaluation