Which of the following is the outcome of the lemons problem in the used-car market?
A) Only low-quality cars will be traded in the market.
B) Only high-quality cars will be traded in the market.
C) Both low-quality and high-quality cars will be traded in the market.
D) No cars will be traded in the market.
A
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Many economists argue that the sharp reduction in U.S. net exports in the mid 1980s was due to
A) expansionary U.S. monetary policy. B) contractionary U.S. monetary policy. C) expansionary U.S. fiscal policy. D) contractionary U.S. fiscal policy.
A decrease in consumer confidence would shift the:
A) aggregate demand curve rightward. B) aggregate demand curve leftward. C) aggregate supply curve rightward. D) aggregate supply curve leftward.
The process of making the best of our limited resources by doing the things we are best at and hiring other people to do the things we are not particularly good at is called
A) absolute advantage. B) comparative advantage. C) specialization. D) protectionism.
The main reason why one nation trades with another is to
A. save its natural resources from rapid depletion. B. exploit the advantages of specialization. C. eliminate the danger of retaliation from other nations. D. improve political alliances.