Suppose that the United States and Cuba decide to open up trade. If each country specializes in the good in which it has a comparative advantage, ________ will gain from that trade because ________
A) both countries; consumption possibilities in both Cuba and the United States will lie outside their PPFs.
B) neither country; their consumption possibilities will not change.
C) only the United States; consumption possibilities in Cuba will lie outside its PPF and U.S. consumption possibilities will not change.
D) only Cuba; consumption possibilities in Cuba will lie outside its PPF and U.S. consumption possibilities will not change.
A
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According to the Quantity Theory of Money, the excessive printing of currency (the issuance of greenbacks and national bank notes) generated the post-Civil War increases in
(a) productivity. (b) prices. (c) production. (d) rising real wages and incomes for all individuals.
Suppose a shortage for good X exists. Given this information, we know that
A) the price of good X will tend to rise toward the equilibrium level. B) the price of good X will tend to fall toward the equilibrium level. C) a government price floor should be imposed above the current price so that the market can work more effectively. D) a government price ceiling should be imposed above the current price so that the market can work more effectively.
To convey information about the dynamic multipliers more effectively, you should
A) plot them. B) discuss these carefully one at a time. C) estimate them by maximum likelihood methods. D) first make sure that they are stationary.
International reserves include all except one of the following. Which is the exception?
a. gold b. dollars c. yen d. Special Drawing Rights e. oil