A country enjoys an absolute advantage in the production of a good if that good can be produced at a lower cost in terms of other goods.
Answer the following statement true (T) or false (F)
False
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Based on the figure below, the economy is initially at point A on the monetary policy reaction function (RF1) and the aggregate demand curve (AD1). The actual rate of inflation is p' and the Federal Reserve's target inflation rate is p*1. 
If the Federal Reserve raises its target inflation rate to p*3, then the Federal Reserve's monetary policy reaction function will ________ and the aggregate demand curve will ________.
A. shift to RF2; shift to AD2 B. shift to RF3: shift to AD3 C. shift to RF3; shift to AD2 D. shift to RF2: shift to AD3
Resource prices are fixed for some period of time because
a. some workers enter into long-term contracts. b. firms purchase raw materials on set-price contracts. c. many workers get pay increases only once a year. d. All of the above are correct.
If, in the market for money, the quantity of money demanded exceeds the money supply, the interest rate will:
A. fall, causing households and businesses to hold less money. B. rise, causing households and businesses to hold less money. C. rise, causing households and businesses to hold more money. D. fall, causing households and businesses to hold more money.
In 2012, U.S. exports of services ______ U.S. imports of services by about _____.
A. exceeded; $19B B. fell short of; $19B C. exceeded; $196 B D. fell short of; $196B