Suppose that in Paraguay, one of the poorest countries in the Americas, only two of the goods that are produced can compete in world markets, tea and DVD players. Given this success in exporting, Paraguay
a. should specialize only in DVD players since tea production is an old industry.
b. should specialize in the production of tea, since its people are probably too poor to buy DVD players.
c. should stop exporting both goods and produce more food products for its people.
d. is better off producing both goods in which it has a comparative advantage, relative to all other goods.
d. is better off producing both goods in which it has a comparative advantage, relative to all other goods.
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Causation occurs when:
A) two variables tend to move in opposite directions. B) change in one variable is the reason for the change in another variable. C) two variables tend to move in the same direction. D) change in one variable does not cause any change in another variable.
The total multiplier of government expenditure is
A) zero. B) between zero and one. C) one. D) larger than one.
All of the following entry methods provide firms with familiarity with a foreign market, expect which one?
A) partnership B) merger C) independent entry D) joint venture
The country that did NOT opt out of the currency union is:
A) United Kingdom. B) Sweden. C) Denmark. D) Italy.