Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. The United States has a comparative advantage in producing
A) food.
B) clothing.
C) food and clothing.
D) neither good.
A
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The long-run Phillips curve applies when the economy is at full employment, so the long-run Phillips curve is ________, which demonstrates that changes in the inflation rate ________ effect on unemployment
A) horizontal; have no B) an upward sloping straight line with a 45 degree slope; have an C) vertical; have no D) vertical; have an E) a downward sloping straight line with a 45 degree slope; have an
A university raises annual tuition by 10 percent. No other events have occurred, and the university's revenues have increased. It must be TRUE that
A) the associated change in quantity demanded was smaller than 10 percent. B) the associated change in quantity demanded was equal to 10 percent. C) the associated change in quantity demanded was greater than 10 percent. D) there was no associated change in quantity demanded.
The effect of a change in net taxes on the quantity of real GDP demanded equals the resulting shift in the consumption function times _____
a. the marginal propensity to consume b. the marginal propensity to save c. the autonomous net tax multiplier d. the simple spending multiplier e. the marginal tax rate
A mixed economy
A. Relies on the use of central planning by private firms rather than the government. B. Is one that allows trade with other countries. C. Is justified by the superiority of laissez faire over government intervention. D. Utilizes both market and nonmarket signals to allocate goods and services.