For trade to work out properly, _____.
(A) Both parties should have an absolute advantage.
(B) Both parties should have a comparative advantage.
(C) One party should have an absolute advantage while the other should have a comparative advantage.
(D) Both parties should be making about the same profit from the exchange.
Ans: (D) Both parties should be making about the same profit from the exchange.
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Greater optimism about the expected profits from investment projects
A) shifts the demand for loanable funds curve rightward. B) shifts the demand for loanable funds curve leftward. C) causes a movement upward along the demand for loanable funds curve. D) causes a movement downward along the demand for loanable funds curve.
Explain who gains and who loses from an import quota and why the losses exceed the gains
What will be an ideal response?
Those economists who argue that the European Union is not a true optimal currency area cite _______________ and __________________ as justifications for this position
A) differences in culture; decreased labor mobility B) differences in language; culture C) decreased labor mobility; language differences D) none of the above
When the economy swings back toward the boom part of a business cycle which of the following will generally not occur?
A. Cyclical unemployment will decrease. B. Actual wages will approach the market-clearing level. C. Labor demand will increase. D. Labor supply will decrease.