Let's assume that cloth-making (labor-intensive) and farming (land-intensive) are the only two sectors of production in a country. If this country is labor-abundant, and if trade corresponds to the Heckscher-Ohlin theory, which of the following groups will gain in the short run, but lose in the long run, from the opening of trade?
A. Domestic landowners in the domestic cloth-making sector
B. Foreign workers in the foreign cloth-making sector
C. Foreign landowners in the foreign farming sector
D. Domestic landowners in the domestic farming sector
Answer: A
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According to the classical theory, an inward shift in aggregate demand would reduce
A) real Gross Domestic Product (GDP) and the price level. B) the price level but have no effect on real Gross Domestic Product (GDP). C) real income but have no impact on the price Gross Domestic Product (GDP). D) the price level but increase real Gross Domestic Product (GDP).
Which of the following is most likely to help promote the efficient use of resources and rapid economic growth?
a. high tariffs and imposition of other trade restrictions b. high marginal tax rates c. an open and competitive capital market d. high rates of inflation
As the price level rises, the interest rate
a. falls, so the supply of dollars in the market for foreign currency exchange shifts left. b. falls, so the supply of dollars in the market for foreign currency exchange shifts right. c. rises, so the supply of dollars in the market for foreign currency exchange shifts left. d. rises, so the supply of dollars in the market for foreign currency exchange shifts right.
If the principal amount of a bond is $10,000,000, the coupon rate is 7%, and the inflation rate is 4%, then the annual coupon payment made to the holder of the bond is:
A. $700,000. B. $70,000. C. $400,000. D. $300,000.