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.
b
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One way the "lemons problem" in the used-car market can be mitigated is by
a. raising the price of used cars. b. hiring auto experts to sell used cars. c. requiring sellers to guarantee trouble-free cars. d. allowing owners to trade in their own cars when they purchase a used car.
Which of the following is not correct?
a. The regional Federal Reserve Banks play a role in regulating banks and ensuring the health of the banking system. b. The President of the New York Federal Reserve Regional Bank always gets to vote on the decisions made by the Federal Open Market Committee. c. U.S. monetary policy is made by the Federal Open Market Committee. d. The Federal Open Market Committee meets every 12 weeks.
The optimal hiring rule is to employ labor up to the point where:
A. wage = MFC. B. wage = MP. C. wage = MR D. wage = MRP
In order to function as a medium of exchange, money must:
A. be backed by gold. B. be generally accepted in exchange for goods and services. C. be backed by some precious commodity. D. maintain a constant value over an extended period of time.