Refer to Table 7-6. Which country has a comparative advantage in producing belts?
A) Estonia B) Morocco C) both countries D) neither country
B
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Consider two economies with the same GDP per capita: Barylia and Lithasia. The savings rate in Barylia is 20% while the savings rate in Lithasia is 60%
a. Which of these two countries is likely to accumulate capital faster? b. The government in Barylia decides to provide incentive to its citizens to increase the savings rate further to 80% as a means to improve standards of living. Will the increase in savings and thus investment and output translate into improvements in the standard of living?
What is the slope of the line in the graph?
A) +1/2 B) -1/2 C) +2 D) -2 E) -3/4
Supply-siders argue that:
A. reductions in government spending cut infrastructure investment which hurts private sector investment. B. increases in government spending increase infrastructure investment which helps private sector investment. C. increases in government spending causes private sector investment to fall because the government pushes up interest rates. D. reductions in government spending cause private sector investment to fall because the government pushes up interest rates by borrowing.
The figure below shows the market for MP3 players in a small country. Dd and Sd are the domestic demand and domestic supply curves of the MP3 players. QQ is the quota quantity. The quota on MP3 players will cause domestic consumers to
A. lose $195 million. B. gain $25 million. C. lose $25 million. D. lose $170 million.