_____________ advantage can be the result of a country’s natural endowment.
a. Absolute
b. Real
c. Focused
d. Micro
a. Absolute
Absolute advantage can be the result of a country’s natural endowment.
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Suppose a country has no trade with other countries and people can borrow as many funds as they want at the current interest rate. An increase in the price level will generate
A) a decrease in total planned real expenditures because of the real-balance effect. B) a decrease in total planned real expenditures because the indirect effect will be stronger than the real-balance effect. C) a decrease in total planned real expenditures because the real-balance effect will be stronger than the indirect effect and the open-economy effect. D) a decrease in total planned real expenditures because of the open-economy effect and the indirect effect.
If there is an increase in government spending that is financed by issuing bonds, then
a. interest rates should rise which increases private investment. b. interest rates will remain the same unless taxes are reduced as well. c. interest rates should fall which increases private investment. d. interest rates should rise which decreases private investment. e. None of the above.
Based on the answer above, the price for iPads _____________ and the quantity demanded for iPads ____________
a. Increase; increase b. Increase; decrease c. Decrease; increase d. Decrease, decrease
The balance on goods and services is the same as the balance on the current account
a. True b. False Indicate whether the statement is true or false