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 despite this, EU nations chose to trade with Latvia. Engaging in trade with Latvia allowed ________ to become more productive.
A. workers in the EU but not workers in Latvia
B. workers in Latvia but not workers in the EU
C. neither workers in the EU nor in Latvia
D. workers in both the EU and in Latvia
Answer: D
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Most statistical studies on the relationship between real interest rates and saving conclude that higher real interest rates
a. increase saving. b. tend to decrease saving. c. tend to decrease both consumption and saving. d. have no effect on saving.
The interest rate effect shows that if the price level increases
A. consumers and businesses will borrow more to replenish their real money balances, which pushes up interest rates and causes spending to decrease. B. U.S. exports and imports will both decrease. C. consumers and businesses will increase their spending to buy the same amount of goods as before to make up for the higher interest rates. D. the real value of financial assets will increase.
Under conditions of perfect competition, if a profitable firm pushes its output beyond the point where MR equals MC,
a. profits increase. b. profits diminish. c. AFC increases. d. AVC decreases.
To an economist, total costs include
A) explicit, but not implicit costs. B) implicit, but not explicit costs. C) explicit and implicit costs. D) neither explicit nor implicit costs.