When two countries specialize and trade:
A. they can have consumption possibilities beyond their production possibilities.
B. surplus can be gained by both countries.
C. both can enjoy more output than either could produce on its own.
D. All of these are true.
Answer: D
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A soda factory employs seven workers and produces 500 bottles of soda a day. The company reduces the workforce to six workers and output is now 450 bottles a day. The seventh worker:
A. had a marginal product of 50 bottles of soda. B. caused average product to fall. C. had a lower marginal product than the sixth worker. D. All of these are true.
Deciding which exchange rate should be used in the presentation of financial statements
A) is a rather straight forward decision. B) is called exchange rate risk. C) is called market-based exposure. D) is called balance sheet exposure.
Licensing laws
a. are illegal in most industries b. serve to increase wage rates in some industries c. lead to higher employment levels in some industries d. reduce the quality of labor in a particular market e. are rarely effective at increasing wage rates
According to real business cycle theorists, changes in Real GDP are the result of initial changes in
A) aggregate demand. B) the money supply. C) the expected inflation rate. D) prices. E) none of the above