If the world supply curve is SW0, and the country discovers a significant natural resource that can be exported, the world supply curve will shift:
A. up and the trade balance will become a surplus.
B. up and the trade balance will become a deficit.
C. down and the trade balance will become a surplus.
D. down and the trade balance will become a deficit.
Answer: D
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Money serves as a medium of exchange means that
A) it benefits both buyers and sellers. B) it eliminates the need for barter. C) it reduces transaction costs. D) All of the above are correct.
Which of the following represents the opportunity cost of holding money?
A) the interest rate B) liquidity C) the rate of inflation D) none of the above
If human capital was included in the measurement of wealth, the measurement of wealth would be
A) more equal and more accurate. B) more equal and less accurate. C) less equal and more accurate. D) less equal and less accurate.
During the Great Depression, many industrial countries tried protecting domestic jobs by raising tariffs. Economic theory would suggest that the result would be
A) success for only the countries that raised tariffs first. B) success for firms that had a comparative advantage in manufactured goods rather than agricultural goods. C) reduced exports and volume of trade for everyone. D) increased incomes in the countries that pursued this policy.