Suppose that only two goods are produced in an economy. If a country possesses the comparative advantage in the production of one good then it:
A. cannot also possess the comparative advantage in the production of the other good.
B. must also possess the absolute advantage in the production of that good.
C. cannot also possess the absolute advantage in the production of that good.
D. must also possess the comparative advantage in the production of the other good.
Answer: A
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Some economists suggest the optimal way for a nation to protect its access to a strategic mineral is with
A) an infant industry tariff. B) a high rate of effective protection to keep local mines in business. C) a quota on imports of the mineral. D) a low nominal rate of protection. E) a stockpile.
The value of money in the United States is based on the stocks of precious metals held by the U.S. government.
Answer the following statement true (T) or false (F)
Recall the Application about the free-agent market for professional baseball pitchers to answer the following question(s).Recall the Application. The market for baseball pitchers suffers from an asymmetric information problem because:
A. the pitcher's current team has superior information concerning the health of the pitcher. B. the potential new teams have superior information concerning the health of the pitcher. C. baseball teams never sign injury-prone pitchers. D. a physical exam ensures that both the player's current team and potential new teams have the same information concerning the player's health.