When two countries specialize in the production of different goods and trade with each other, it is most likely each country will
A) export the goods in which it has a comparative advantage.
B) export the goods in which it has an absolute advantage.
C) import the goods in which it has a comparative advantage.
D) import the goods in which it has an absolute advantage.
Answer: A
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Refer to Table 6-2. Assume that an economist has estimated the price elasticity of demand values in the table above. Use the data in the table to select the correct statement
A) The difference in elasticity values is explained by the fact that the more narrowly we define a market the more elastic the demand will be. B) There are fewer substitutes for "All carbonated soft drinks" than there are for "All soft drinks." C) The elasticity for "All soft drinks" is less than the elasticity for Coca-Cola because Coca-Cola is more of a luxury than a necessity; "All soft drinks" represent goods that are more necessity than luxury. D) The demand for Coca-Cola is inelastic.
Based on the table, the multiplier in this case is ______.
a. 2/3
b. 3
c. 10 billion
d. 30 billion
In the absence of high or volatile inflation, an increase in the price of oil:
A. can be confidently interpreted as meaning that oil producers are earning greater profit. B. can be confidently interpreted as meaning that the money supply has increased. C. can be confidently interpreted as meaning that oil has become more scarce. D. can be confidently interpreted as meaning that the velocity of money has increased.
A new financial innovation results in people switching their funds from checking deposits to savings accounts. The quantity of M1 ________ and the quantity of M2 ________.
What will be an ideal response?