How can comparative advantage yield gains from trade?
What will be an ideal response?
Comparative advantage refers to the ability to produce a good or service at lower opportunity cost compared to other producers. If nations specialize in producing goods in which they have a comparative advantage and trade at rates of exchange that are more favorable than the opportunity costs they would have faced without trade, then they can obtain more goods for consumption with trade than they could have obtained for consumption without trade. These consumption gains are the gains from trade.
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The action of having to purchase the will in order to purchase gas is known as A) a surplus. B) a price support. C) the price system. D) a black market.
Which of the following represents positive economics?
a. Policy A is fair. b. Outcome B is the best objective to achieve. c. If policy A is followed, then outcome B results. d. All of these.
An increase in consumer wealth shifts the consumption function downward
a. True b. False Indicate whether the statement is true or false
The most effective and frequently used tool the Fed has to increase or decrease the economy's money supply is
a. open market operations b. changes in the legal reserve requirement c. changes in the discount rate d. changes in the federal funds rate e. moral suasion