The expansion of world output as a result of trade is mainly due to the effects of
A. Improved terms of trade.
B. Specialization according to absolute advantage.
C. Specialization according to comparative advantage.
D. Higher trade barriers.
Answer: C
You might also like to view...
The chain-weighted index for GDP and the CPI differ in that the CPI
A) asks how much a fixed basket of goods costs in the current year as compared to the cost of those same goods in a base year while the chain-weighted index takes an average of price changes using base years from neighboring years. B) excludes price changes from used and imported goods while the chain-weighted index includes these price changes. C) is calculated by the Commerce Department while the chain-weighted index is calculated by local newspapers. D) is calculated in nominal terms and the chain-weighted index is calculated in real terms.
Refer to the figure above. Calculate the total surplus in Lithasia under free trade
A) $150 B) $250 C) $325 D) $375
Other things equal, an increase in aggregate demand will result in:
a. an economic expansion. b. higher unemployment and a lower equilibrium price level. c. an economic recession. d. a decrease in equilibrium real GDP and an increase in the equilibrium price level. e. a decrease in the overall economic welfare.
Which of the following financing tactics would most likely help an MNE avoid bankruptcy?
A) integrating e-commerce opportunities with domestic sales in order to maintain a steady balance of income and expenditures B) agreeing to forward contracts with customers and hedging purchases and sales on future currency rates C) organizing the capital structure so that the amount of debt financing is twice the level of equity financing D) keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions