Comparative advantage refers to a country's:
A. Ability to produce a specific good with fewer resources than another country.
B. Monopoly power in the world market for a specific good.
C. Ability to sell a specific good for a higher price than another country.
D. Ability to produce a specific good at a lower opportunity cost than another country.
D. Ability to produce a specific good at a lower opportunity cost than another country.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Which of the following is true concerning the impact of tariffs and quotas?
a. Tariffs raise the price of a good but quotas do not. b. Tariffs reduce consumer and producer surplus whereas quotas reduce domestic consumer surplus and increase domestic producer surplus. c. Both tariffs and quotas increase the quantity demanded. d. The revenue resulting from a tariff goes to the government whereas the revenue resulting from a quota goes to whoever is awarded the right to sell the product. e. The potential welfare loss is greater with tariffs than quotas.
Which of the following is a liability of a bank and an asset of its customers?
a. deposits of its customers and loans to its customers b. deposits of its customers but not loans to its customers c. loans of its customers but not the deposits of its customers d. neither the deposits of its customers nor the loans to its customers
An increase in personal income tax rates would tend to reduce
A. gross investment. B. consumption. C. government purchases. D. net exports.