Which of the following statements is true?
A. Comparative advantage does not require absolute advantage.
B. Absolute advantage requires comparative advantage.
C. Comparative advantage requires absolute advantage.
D. Absolute advantage implies comparative advantage.
Answer: A
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Which of the following is consistent with classical growth theory?
A) Real GDP per person will increase because technological change induces investment. B) Real GDP per person will never permanently increase. C) Competition destroys innovation and decreases profit. D) As real GDP increases, there will be a decrease in the rate of population growth.
Explain how we "read" the three graphs in Figs. A1.1 and A1.2
What will be an ideal response?
Investment banks do NOT engage in which of the following?
A) proprietary trading B) securitization C) lending to households D) underwriting