Suppose the United States can produce either 1 ton of potato or 0.5 tons of wheat per worker per year, while Ireland can produce either 3 tons of potatoes or 2 tons of wheat per worker per year. There can be mutual gains from trade if:
a. the United States specializes in potatoes because of its comparative advantage in producing potatoes
b. the United States specializes in wheat production because of its absolute advantage in producing wheat.
c. the United States specializes in wheat production because of its comparative advantage in producing wheat.
d. the United States specializes in potatoes because of its absolute advantage in producing potatoes.
a
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The downward slope of a demand curve
A) represents the law of demand. B) shows that as the price of a good rises, consumers increase the quantity they demand. C) indicates how the quantity demanded changes when incomes rise and the good is a normal good. D) indicates how demand changes when incomes rise and the good is a normal good. E) indicates how demand changes when the price changes and the good is a normal good.
Which of the following is true about the Taylor principle?
A) it explains the link between higher inflation and higher real interest rates B) it is the foundation for an upward sloping MP curve C) it reflects the practice of monetary policy D) all of the above E) none of the above
GDP per capita is
a. GDP/GDP deflator. b. GDP deflator/GDP. c. population/GDP. d. GDP/population.
If the Fed conducted an open market sale of bonds, what would most likely happen in the bond market?
a. The excess demand for bonds would cause the price of bonds to fall. b. The excess supply of bonds could cause the price of bonds to rise. c. There would be no effect in the bond market. d. The excess supply of bonds would cause the price of bonds to fall. e. The excess demand for bonds would cause the price of bonds to rise.