Full-employment equilibrium occurs when
A) real GDP exceeds potential GDP.
B) real GDP equals potential GDP.
C) potential GDP exceeds real GDP.
D) None of the above answers are correct.
B
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Indicate whether the statement is true or false
A country that has relatively large amounts of a particular resource at its disposal
a. will tend to have an absolute advantage b. will trade the resource for some good in which that country has an absolute advantage c. will tend to have a comparative advantage in goods that make heavy use of that resource d. will trade the resource for some good in which that country has a comparative advantage e. will tend to have a low exchange rate
If the U.S. imposed an import quota on furniture, U.S. net exports of furniture
a. and net exports of other U.S. goods and services would rise. b. would rise but net exports of other goods and services would fall. c. would fall but net exports of other goods and services would rise. d. and net exports of other U.S. goods and services would fall.
The inflation caused by supply shocks is called:
a. demand-pull inflation. b. cost-push inflation. c. wage inflation. d. expected inflation.