If a nation restricts trade with other nations, then the most likely effect is:
A. Lower prices of goods and services in the nation
B. Increased specialization of production
C. Expanded economic wealth of the nation
D. Make consumers in the nation worse off
Answer: D
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Which is the most likely effect upon the market for cotton of an increase in production costs due to higher oil prices?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged. B) A decrease in supply and hence a decrease in both the price of cotton and the quantity exchanged. C) A decrease in supply and hence an increase in the price of cotton and a decrease in the quantity exchanged. D) A decrease in both supply and demand and hence a decrease in the quantity exchanged but no predictable change in the price of cotton.
The key feature due to which unexpected inflation decreases the unemployment rate is that:
a. expectations are formed irrationally. b. reservation wages of workers are fixed. c. workers behave irrationally. d. firms are greedy. e. government policy is time consistent.
Gross domestic product is defined as the ____________ value of all final goods and services produced in a nation in a year.
a. past b. future c. current d. historical
Recessions are periods of declining economic activity
a. True b. False Indicate whether the statement is true or false