Comparative advantage is directly related to which of the following concepts?
A) productivity
B) efficiency
C) opportunity cost
D) competition
E) fairness
C
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Suppose the Canadian central bank wants to keep the exchange rate of the Canadian dollar with the U.S. dollar constant over time. An increase in the demand for Canadian goods by American residents will lead the Canadian central bank to
A) sell American goods in exchange for Canadian dollars. B) buy more Canadian goods with Canadian dollars. C) increase the demand for Canadian dollars in the foreign exchange market. D) increase the supply of Canadian dollars in the foreign exchange market.
Public choice theory indicates that representative government yields outcomes more consistent with economic efficiency when a close relationship exists between the benefits received and the costs borne by each voter. Which of the following methods of financing a government program will most likely result in a close relationship between voter benefits and costs?
a. progressive income tax b. retail sales tax c. property tax d. user charges
According to computer estimates using a traditional macroeconomic model, the Obama administration found that the multiplier for tax cuts and government expenditures were respectively
a. .99 and 1.59. b. 1.59 and .99 c. 1.3 and 1.7 d. 1.7 and 1.3
The initial impact of an increase in government spending is to shift
A. aggregate supply to the right. B. aggregate demand to the left. C. aggregate demand to the right. D. aggregate supply to the left.