Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concepts of absolute and comparative advantage, we can say that the United States has the comparative advantage in:
A. neither the production of gloves nor radishes.
B. the production of both gloves and radishes.
C. the production of gloves only.
D. the production of radishes only.
Answer: D
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If the MPC were to increase from 0.75 to 0.8, then the spending multiplier would:
A. increase from 4 to 5. B. decrease from 5 to 4. C. increase from 0.2 to 0.25. D. decrease from 1.25 to 1.2.
In an open economy, when the Fed increases the supply of money, it will increase net exports and aggregate demand
a. True b. False Indicate whether the statement is true or false
The dollar price of a good relative to the average dollar price of all other goods is the good's:
A. real price. B. equilibrium price. C. market price. D. nominal price.
The Hart-Scott-Rodino Act of 1980:
A. extended antitrust legislation to proprietorships and partnerships. B. made it legal to monopolize a market. C. outlawed asset-purchase mergers that would substantially reduce competition. D. outlawed price discrimination for the purpose of reducing competition.