Zora can produce 4 quilts in a week and she can produce 1 corporate website in a week. Lou can produce 9 quilts in a week and he can produce 2 corporate websites in a week. Zora has the comparative advantage in quilts and the absolute advantage in neither good, while Lou has the comparative advantage in corporate websites and the absolute advantage in both goods
a. True
b. False
Indicate whether the statement is true or false
False
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The new Keynesian sticky-price theory indicates that an increase in aggregate demand generates
A) a speedy rise in real GDP but a sluggish increase in the price level. B) a speedy rise in the price level but a sluggish increase in real GDP. C) sluggish increases in both real GDP and the price level. D) rapid increases in both real GDP and the price level.
A study showing that eating ranch salad dressing might be harmful to one’s health slightly reduces the demand for the product. However, a new bottling method greatly increases the production of this dressing. Considering this, the equilibrium quantity of this dressing would ______.
a. decrease b. increase c. remain constant d. be indeterminate
What was a major characteristic of the subprime loans that were taken out in the early 2000s?
a. They were hard to obtain. b. They required a large down payment. c. They were given to risky borrowers. d. They were based on a fixed rate.
The real wage
A. automatically increases with the cost of living. B. is the nominal wage divided by the price level. C. is the nominal wage multiplied by the price level. D. is the price level divided by the nominal wage.