The terms of trade between two goods depend on:
A. Which country has an absolute advantage in the good.
B. Negotiations by the Federal Reserve.
C. Each country's domestic opportunity costs.
D. Which country pays the transportation costs.
C. Each country's domestic opportunity costs.
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If a firm hires a resource in a perfectly competitive resource market,
a. it must also be a price taker in the product market b. it must also be a monopolist in the product market c. it faces a horizontal marginal resource cost curve d. it faces an upward-sloping marginal resource cost curve e. it faces a downward-sloping marginal resource cost curve
The economic behavior of government is constrained by
a. limited budgets b. the absence of prices on most government output c. moral philosophy of the community d. low voter participation rates e. political self interest
Why might an expansion in government spending increase the severity of the coordination problem during a recession?
a. Increases in government spending will not affect the composition of aggregate demand. b. Congress is unlikely to approve increases in government spending during a recession. c. Spending increases will be driven by political considerations and will often flow into areas where resources are already fully employed. d. Government spending can be counted on to flow toward high productivity projects.
Recall the Application about the Fed's policy of quantitative easing to answer the following question(s). Recall the Application. By the end of the last phase of quantitative easing in late 2014, that value of the Fed's assets was:
A. $1 trillion. B. $2 trillion. C. $3 trillion. D. $4.5 trillion.