People often choose to specialize and trade because:
A. it always allows them to produce at a point beyond their own production possibilities frontier.
B. they can take advantage of another nation's poor choices.
C. they can consume a bundle of goods on their production possibilities frontier.
D. it will allow them to enjoy more goods than they can create on their own.
Answer: D
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If workers and firms lower their inflation expectations
A) actual inflation will fall to match expected inflation. B) unemployment will rise. C) the short-run Phillips curve will be vertical. D) the short-run Phillips curve will shift downward.
Assuming relative PPP, fill in the table below:
What will be an ideal response?
Which of these economic variables is countercyclical?
A) investment spending B) unemployment C) demand for foreign products D) all of the above E) none of the above
Refer to Scenario 17.2. The highest level of y* that can be set and still have the high-productivity people choose to meet it is
A) 90. B) 60. C) 30. D) 22.5. E) 15.