Suppose that all goods are made with two factors?labor and capital. The table below shows the total endowments of each factor in the United States and Canada.
Based on Table 4.1, according to the Stolper-Samuelson Theorem, the income distribution effects of free trade in the United States are likely to favor
a. either capital or labor, depending on U.S. productivity
b. Not enough information to tell.
c. neither capital nor labor.
d. capital.
e. labor.
Ans: e. labor.
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Suppose Happy Cows has a marginal cost equal to 0.5Q and Free Cows has a marginal cost equal to 2Q.
A) All else equal, neither Free Cows nor Happy Cows can benefit from an accurate forecast. B) All else equal, an accurate forecast is more valuable to Free Cows than Happy Cows. C) All else equal, an accurate forecast has the same value to both Free Cows and Happy Cows. D) All else equal, an accurate forecast is more valuable to Happy Cows than Free Cows.
A difficulty with effective fiscal policy is the:
A. reality of time lags. B. guess as to what potential GDP is. C. lack of relevant information needed to decide the magnitude of change. D. All of these are true.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Among the reasons that health care expenditures have grown so rapidly in the United States over the last two decades are all of the following EXCEPT
A. third-party financing. B. an emphasis on wellness programs and preventive medicine. C. the aging of the U.S. population. D. expensive new medical technologies.