Thailand has a comparative advantage in rice and an absolute advantage in both rice and cell phones. Indonesia has a comparative advantage in cell phones. According to this scenario
A. Indonesia should export rice and import cell phones.
B. Thailand should export rice and import cell phones.
C. Indonesia should import both cell phones and rice.
D. Thailand should export both cell phones and rice.
Answer: B
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Which of the following would most likely reach the long run most rapidly?
a. a nuclear power plant b. a college c. a lumber mill d. a shopping mall e. a hot dog stand
Nontradables are cited as a reason why purchasing power parity doesn't hold because:
A. there is no economic opportunity to profit if the goods cannot be sold in another market for another price. B. location-specific goods are impossible to calculate a price elsewhere for. C. goods that you can't transport cannot be sold for a profit elsewhere, even if the price differs in different locations. D. All of these statements are true.
Suppose that a mixed open economy is producing at its equilibrium income and that net exports are zero. If at the equilibrium income the public sector's budget shows a surplus:
A. C a + I g + X n + G must exceed GDP. B. planned investment must exceed saving. C. a recessionary expenditure gap must exist. D. saving must exceed planned investment.
In the mid-1970s, the United States switched from running a trade ________ to running a trade ________.
A. deficit; balance B. deficit; surplus C. surplus; deficit D. balance; surplus