If real GDP falls, then so must nominal GDP.
Answer the following statement true (T) or false (F)
False
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The above table shows production combinations on a country's production possibilities frontier. Which of the following is an example of a production point that is inefficient?
A) 0 units of good X and 40 units of good Y B) 6 units of good X and 28 units of good Y C) 10 units of good X and 16 units of good Y D) 3 units of good X and 35 units of good Y
In the case of negative externalities in production, the firm's internal costs:
a. exceed the external costs. b. are less than the external costs. c. equal the external costs. d. understate the true cost of producing the product. e. overstate the true cost of producing the product.
When the absolute price elasticity of demand is less than 1, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.
Answer the following questions true (T) or false (F)
1. If a country has a comparative advantage in producing a product, it may or may not have an absolute advantage in producing that product. 2. If Estonia has an absolute advantage in the production of two goods compared to Norway, Estonia can not benefit from trade with Norway. 3. The ability of a firm or country to produce a good or service at a lower opportunity cost than other producers is called comparative advantage.