A country will be able to consume a combination of goods that is not attainable solely from domestic production if
A) the world terms of trade differ from its domestic relative costs.
B) the country specializes in one product.
C) the country avoids international trade.
D) the world terms of trade equal the domestic relative costs.
E) the country's domestic production value equals world relative value.
A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
________ choose the quantities of factors of production to hire, and ________ choose the quantities of goods and services to produce
A) Entrepreneurs; firms B) Firms; firms C) Markets; markets D) Factor markets; goods markets E) Firms; households
The earnings of most people
A) increase steadily until retirement. B) increase with age until around age 50 due to increased experience, training, and hours worked. C) increase with age until around age 40 due to increased experience and hours worked. D) increase with age until around age 60 due to increased experience, training, and hours worked, then level off as hours worked levels off.
When something is indexed:
A. its value is automatically adjusted in proportion to the cost of living. B. it is expressed as nominal value multiplied by price index. C. its real value is converted into nominal terms for comparison. D. its relative rank in consumption items is compensated for relative to its cost.