The primary benefit that results when a nation employs its resources in accordance with the principle of comparative advantage is
What will be an ideal response?
a larger output resulting from a more efficient use of resources.
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If the world price for good A is above the domestic price for good A without trade, then consumer surplus will ________ and total economic surplus will ________ with trade.
A. increase; decrease B. decrease; increase C. decrease; decrease D. increase; increase
The crowding-out effect can be:
a. zero. b. partial. c. complete. d. any of these.
Private entrepreneurs are likely to make better investment decisions than central planners because
A) failure of a government project will reduce the personal wealth of the planners involved in the decision. B) the entrepreneurs can often turn a project's failure into a request for additional funding to rectify the "problem". C) the entrepreneurs seek ever larger budgets, while planners will be more focused on cost reductions and efficiency. D) the entrepreneurs who make mistakes must bear the costs of these mistakes
Refer to Figure 16.2. For the given Phillips curve, a decrease in aggregate demand, ceteris paribus, could cause a
A. Rightward shift in the curve. B. Movement from point A to point B. C. Movement from point B to point A. D. Leftward shift in the curve.