Suppose Mexico can produce 5 autos or 10 corn. Suppose the United States can produce 4 autos or 20 corn. If opportunity costs are constant for both countries, which of the following would NOT be a potential terms of trade?
A) 1 auto for 3 corn
B) 1 auto for 4 corn
C) 1 corn for 1/3 of an auto
D) 1 corn for 1 auto
D
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The yield curve is
A) the term structure of interest rates. B) the relation between maturity and yield of a bond. C) maturity. D) both A and B E) all of the above
The collapse of the subprime mortgage market
A) did not affect the corporate bond market. B) increased the perceived riskiness of Treasury securities. C) reduced the Baa-Aaa spread. D) increased the Baa-Aaa spread.
As relative prices in various industries change due to trade, the marginal product of fixed resources used in the expanding industry __________, and the marginal product of fixed resources used in the contracting industry __________.
a. rises; falls b. remains the same; remains the same c. changes by exactly the same percentage; changes by exactly the same percentage d. falls; rises
Table 10-1 Aggregate Quantity Aggregate Quantity ? Demanded Supplied Price (billions) (billions) Level $3500 $2900 65 3400 3000 75 3350 3150 90 3250 3250 110 3100 3400 130 In Table 10-1, if full employment occurs at $3,400 billion, then
A. the economy experiences a recessionary gap of $75 billion. B. the economy experiences a recessionary gap of $150 billion. C. the economy experiences an inflationary gap of $75 billion. D. the economy experiences an inflationary gap of $150 billion.