A country has an absolute advantage in the production of a good if that country
a. can produce the good using fewer resources than another country would require
b. has the lowest opportunity cost of producing the good and can produce it with the fewest resources
c. has the lowest opportunity cost of producing the good regardless of whether it is produced with the fewest resources
d. has the greatest opportunity cost of producing the good regardless of whether it is produced with the fewest resources
e. has the greatest opportunity cost of producing the good and produces it with the fewest resources
A
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If the expansionary effect of additional government expenditure ________ the contractionary effect of the fall in private investment, the labor demand curve ________
A) equals; will remain at its initial position B) exceeds; will shift to the left C) equals; will shift to the right D) exceeds; will remain unchanged
The ________ the exchange rate, the ________ are foreign-produced goods and hence the greater the quantity of dollars supplied
A) higher; cheaper B) lower; cheaper C) higher; more expensive D) lower; more expensive
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and reserve-related (central bank) transactions become more positive (or less negative). b. Real GDP and reserve-related (central bank) transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. Real GDP falls, and reserve-related (central bank) transactions remain the same. e. Real GDP rises, and reserve-related (central bank) transactions remains the same.
Why do economists prefer to compare Real GDP figures for various years instead of GDP figures?
A) Because when GDP in one year is higher than in another year, there is no way to tell why it is higher. Is it because output is higher, prices are higher, etc.? This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because output is higher. B) Because when GDP in one year is higher than in another year, there is no way of knowing if the quality of goods produced is higher in one year than the other. This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because the quality of the goods produced is higher. C) Actually the question is incorrect. Economists prefer to compare GDP figures instead of Real GDP figures. D) Because Real GDP is easier to compute than GDP. E) Because when GDP in one year is higher than in another year, there is no way to tell if the quality of life is higher in one year than the other. This is not the case with Real GDP. If Real GDP is higher in one year than in another year, it is because the quality of life is higher.