Recall the Application about productivity in the nation of Latvia in the 1990s to answer the following question(s). According to this Application, workers in the EU were more productive than workers in Latvia in the 1990s, yet EU nations still purchased products from Latvia. This is because Latvia ________ in the production of the products it sold to EU nations.
A. had an absolute advantage
B. had a comparative advantage
C. used fewer resources
D. had a higher opportunity cost
Answer: B
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In the circular flow, an increase in the money supply tends to result when
a. planned I equals planned S. b. planned I is less than planned S. c. planned I is greater than planned S. d. there is a surplus government budget.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
According to the text, identical technologies are a more reasonable assumption for:
A. the shoe industry. B. the call center industry. C. neither the shoe nor call center industry. D. both the shoe and call center industries.
When the price of a bond equals the face value the:
A. current yield is equal to the coupon rate. B. yield to maturity is greater than the current yield. C. yield to maturity will be above the coupon rate. D. yield to maturity will be below the coupon rate.