According to New Trade Theory,
a) international trade is not a zero-sum game, but a win-win proposition
b) a nation can create new comparative advantages by subsidizing key industries
c) protectionism is justified in order to allow “infant industries” to mature
d) competitiveness is an inappropriate model for countries to follow in foreign trade
e) trade wars benefit society by raising the level of competitiveness
b) a nation can create new comparative advantages by subsidizing key industries
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The purpose of the restrictive debt covenant that prohibits borrowers from entering into certain types of leases is to
A. ensure a cash shortage does not cause an inability to meet current obligations. B. prevent liquidation of assets through large salary increases of key employees. C. protect the lender by controlling the risk and marketability of the borrower's security investments alternatives. D. limit the amount of fixed-payment obligations.
The demand curve for human organs is upward sloping
a. True b. False Indicate whether the statement is true or false
Since a monopolist faces a downward sloping demand curve,
a. the monopolist is able to sell all that it wants at whatever price the monopolist chooses. b. it is necessary for the monopolist to lower the price to sell additional units of the good. c. the monopolist sells only a fraction of the total sales of the good in the market d. the monopolist must always make an economic profit.