Suppose that the Home country in the twosector (manufacturing and agriculture) specificfactors model has a comparative advantage in manufacturing output. What will happen to the amount of land used in producing agricultural output when trade occurs?
a. It will fall.
b. It will rise.
c. It will not change.
d. It will first fall, then rise.
Ans: c. It will not change.
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Joe's increase in wages has been identical to the increase in the price level. Joe thinks that he is better off and has increased his expenditures. Joe's behavior is consistent with
A) the classical model. B) Say's law. C) money illusion. D) a vertical aggregate supply curve.
Which of the following is an impact of a rent ceiling set below the equilibrium rent?
A) Renters find apartments to rent more rapidly because the rent ceiling is lower. B) Landlords' incentives to provide apartments decrease. C) The supply of apartments increases as soon as the rent ceiling is imposed. D) A surplus of housing occurs. E) Search for apartments decreases because renters need no longer search for the apartment with the lowest rent.
In the above figure, the slope at point b
A) lies between 1/3 and 1. B) equals 1. C) lies between 1 and 2. D) exceeds 2.
A higher reserve requirement
A. Further limits deposit creation. B. Increases the ability of banks to make loans. C. Increases the borrowing capability of borrowers. D. Lowers the interest rate.