Suppose Brazil has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over Brazil in producing almonds. If trade in almonds is allowed, Brazil
a. will import almonds.
b. will export almonds.
c. will either import almonds or export almonds, but it is not clear from the given information.
d. would have nothing to gain either from exporting or importing almonds.
b
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If a $2 billion increase in investment brings about a $5 billion increase in equilibrium expenditure, we know that the multiplier equals
A) 4. B) 3. C) 10. D) 5. E) 2.5.
What is the difference between foreign direct investment and foreign portfolio investment?
A) Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms, while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. B) Individuals engage in foreign portfolio investment, but only firms can engage in foreign direct investment. C) Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have, but foreign portfolio investment does not expand that access. D) Foreign direct investment only takes place when governments make official purchases or foreign investments, while foreign portfolio investment takes place when firms, individuals, or the government purchase foreign investments.
If demand price elasticity measures 2, this implies that consumers would:
a. buy twice as much of the product if the price drops 10 percent. b. require a 2 percent drop in price to increase their purchases by 1 percent. c. buy 2 percent more of the product in response to a 1 percent drop in price. d. require at least a $2 increase in price before showing any response to the price increase. e. buy twice as much of the product if the price drops 1 percent.
Researchers who make judgements in their experiments based on what is salient rather than on actual probabilities err by using a representativeness heuristic
Indicate whether the statement is true or false