If a country has the ability to produce a specific good with fewer resources than other countries, then it has:
A. A comparative advantage.
B. A trade surplus.
C. Favorable terms of trade.
D. An absolute advantage.
D. An absolute advantage.
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There is no role for government in a free enterprise economy such as the United States.
Answer the following statement true (T) or false (F)
When the Fed changes money supply by selling government securities, the interest rate will
A) fall unless the LM curve is horizontal. B) fall unless the IS curve is vertical. C) rise if the LM curve is vertical or upward sloping. D) remain constant if the LM curve is vertical.
If the exchange rate changes from 1 euro per U.S. dollar to 1.2 euros per U.S. dollar, the Euro has
a. appreciated, since its value has increased b. appreciated, since the price of U.S. dollars has increased c. appreciated, making U.S. goods cheaper in Euros d. depreciated, since its value has declined e. depreciated, since its value has increased
Oil and oil products remain the main fuel for cars, planes, ships, and power plants. The amount of oil still in the earth is finite. Given this information, the supply of gasoline is:
A. unit elastic. B. relatively elastic. C. relatively inelastic. D. greater than the quantity demanded.