Trade is based on
A. absolute advantage.
B. comparative advantage.
C. production costs.
D. relative dollar prices.
Ans: B. comparative advantage.
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The demand for money increases and the demand for money curve shifts rightward if
A) the real interest rate increases. B) the inflation rate increases. C) the nominal interest rate increases. D) the price level falls. E) real GDP increases.
During 2009, General Motors announced that it would close its Saturn facilities in the United States because of the foreign competition it faced. This corporate move
A) increased structural unemployment. B) increased avoidable unemployment. C) increased cyclical unemployment. D) had no impact on unemployment. E) decreased frictional unemployment.
We infer the distribution of income from the distribution of abilities
Indicate whether the statement is true or false
Consider the market for nonalcoholic beers from the previous question. Boors' price in a Nash equilibrium (assuming Bertrand competition in these differentiated beers) is about
a. 1.71 b. 2.55 c. 3.55 d. 4.29