Which of the following statements is TRUE?
a. The HeckscherOhlin model offers a reasonable explanation of the pattern of trade and the gains from trade.
b. The HeckscherOhlin trade model does not offer an explanation of the pattern of trade.
c. The HeckscherOhlin trade model does not offer an explanation of the gains from trade.
d. The Riparian trade model (with labor as the only input) offers a better explanation of the pattern of trade and the gains from trade than the HeckscherOhlin model.
Ans: a. The HeckscherOhlin model offers a reasonable explanation of the pattern of trade and the gains from trade.
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In the recent Global Economic Crisis, the negative wealth effect caused
A) LM curve to shift to the right. B) LM curve to shift to the left. C) IS curve to shift to the left. D) LM curve to shift to the right.
Which of the following inputs is normally considered to be variable in the short run?
A) labor B) capital C) money D) time
Using Figure 1 below, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y3.
D. P2 and Y2.
The City Symphony presents three open-air concerts in the city park pavilion during the spring and summer. Many who attend make donations for symphony expenses, but the donation is not required. Some who attend make no contributions. Economists would
a. classify the noncontributors as detrimental externalities. b. call the concerts excludable events. c. call the noncontributors free riders. d. call the concerts depletable goods.