Specialization and trade are beneficial to society because:
A. a division of labor lowers prices for products.
B. scarce resources are utilized more efficiently.
C. the output of economic goods may be increased with no increase in resources.
D. All of these are correct.
Answer: D
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When a collective action problem exists, the government often has the ability to direct behaviors in ways that make society better off
Indicate whether the statement is true or false
Suppose an economy grows by 2.5 percent, the labor force rises by 3 percent, and capital rises by 1 percent. If capital takes 50 percent of real GDP and labor takes the other 50 percent of real GDP, then the growth in total factor productivity must be _____
a. 6.5% b. 4.5% c. 0.5% d. 6% e. 10%
When an economy is operating well below its full-employment capacity and the marginal propensity to consume is 3/4, a $10 billion increase in investment will cause the equilibrium income to rise by
a. $5 billion. b. $10 billion. c. $20 billion. d. $40 billion.
An index of the weighted exchange value of the U.S. dollar versus the currencies of a broad group of major U.S. trading partners is called:
A) trade-weighted dollar. B) exchange-weighted dollar. C) dollarization. D) bilateral dollar.