Consider a world with two countries and two goods. Under which of the following conditions does comparative advantage NOT exist?
A) One country can produce both goods more cheaply than the other country.
B) One country has more productive resources or inputs than another country.
C) The opportunity cost of producing each good is the same in each country.
D) One country has an absolute advantage in producing one good while the other country has an absolute advantage in producing the other good.
Answer: C
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Which of the following would shift the FE line to the left?
A) A beneficial supply shock B) A decrease in labor supply C) An increase in consumer spending D) An increase in the money supply
Primary credit extended by the Fed is:
A. the highest interest rate loans offered by the Fed. B. loans offered at the prime interest rate for periods exceeding thirty days but less than one year. C. for banks needing long-term loans to work out financial problems. D. short-term, usually overnight loans.
Consider two coupons: one offers 10 percent off a pair of jeans that costs $100, and the other offers 50 percent off a pair of sunglasses that costs $20. Using either coupon requires driving to the shopping mall across town. According to the Weber-Fechner law, which coupon will people tend to perceive as being more valuable?
A. The coupon for the jeans since $100 is greater than $20. B. They will be seen as equally valuable since both lead to a savings of $10. C. The coupon for the sunglasses since 50 percent is greater than 10 percent. D. Neither coupon will be of value to anyone since both require driving across town.
The Board of Governors is made up of experts in:
A. international trade. B. banking. C. fiscal policy. D. All of these are true.