Specialization increases total world output.
Answer the following statement true (T) or false (F)
True
Increased total world output occurs since trade allows each country to produce at a lower opportunity cost, boosting overall production and incomes.
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The important characteristic of normative statements is that they
A) explain what really exists. B) are based on somebody's values and cannot be tested. C) explain what normally happens in the real world. D) help guide us to what will normally occur if some economic variable changes its value. E) do not use the ceteris paribus assumption.
Trade restrictions can prevent purchasing power parity from holding because:
A. the time and energy of importation paperwork can add to the cost of the good sold. B. tariffs can add to the cost of the good sold. C. they can add costs to the selling price because they add to the seller's cost. D. All of these statements are true.
Which of the following is subtracted from gross national product to arrive at the net national product?
a. net income of foreigners b. depreciation c. indirect business taxes d. transfer payments
The figures below illustrate a situation of a trade embargo. In Figure (a) Dd and Sd are the domestic demand and supply curves of the embargoing countries. Prior to the embargo there was free trade at the world price of P0.
As a result of this embargo, the exporting countries not participating in the embargo gain Area
A. a. B. b. C. c. D. (b + c).