When the difference between potential GDP and actual GDP increases, the nation usually suffers from increased inflation.
Answer the following statement true (T) or false (F)
False
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Firms in perfectly competitive markets typically have:
A. one profit-maximizing level of output. B. two profit-maximizing levels of output to choose from. C. several profit-maximizing levels of output to choose from. D. no chance of maximizing profits, since they have no control over market price.
The law of comparative advantage explains why a nation will benefit from trade when
a. it exports more than it imports.
b. its trading partners are experiencing offsetting losses.
c. it exports goods for which it is a high-opportunity cost producer, while importing those for which it is a low-opportunity cost producer.
d. it exports goods for which it is a low-opportunity cost producer, while importing those for which it is a high-opportunity cost producer.
Which of the following statements is true?
A. There are more attainable points than unattainable points in every PPF diagram. B. If scarcity did not exist, neither would a PPF. C. All PPFs are downward-sloping straight lines D. The concept of opportunity costs cannot be illustrated within a PPF framework.
If the price of a typical good rises, the quantity demanded for that good will
A. automatically decrease to zero. B. increase. C. decrease. D. remain the same.