Congressman Smith cites the "jobs argument" when he argues in favor of restrictions on trade; he argues that everything can be produced at lower cost in other countries. The likely flaw in Congressman Smith's reasoning is that he ignores the fact that
a. there is no evidence that any worker ever lost his or her job because of free trade.
b. unemployment of labor is not a serious problem relative to other economic problems.
c. the gains from trade are based on comparative advantage.
d. the gains from trade are based on absolute advantage.
c
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According to this Application, Janet L. Yellen, the Vice-Chair of the Board of Governors, believes that ________ in worldwide demand and ________ of supply were the primary cause of the worldwide increase in commodity prices
A) decreases; shortages B) increases; surpluses C) increases; shortages D) decreases; surpluses
If potential GDP increases,
A) aggregate supply increases. B) the money wage rate must have fallen. C) the quantity of aggregate supply decreases. D) the price level rises. E) aggregate supply does not change.
A normal rate of return on investment is equal to
A) accounting profit minus economic profit. B) the opportunity cost of capital plus any other implicit costs. C) accounting profit plus economic profit. D) total revenue plus total accounting profit
Higher efficiency in the economy can be reached if prices are held low by law.
Answer the following statement true (T) or false (F)