Japan has developed a comparative advantage in designing and producing automobiles. The source of its comparative advantage in these products is
A) technology. B) a strong central government.
C) a favorable climate. D) abundant supplies of natural resources.
A
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Which of the following explains why frictional unemployment exists in an economy?
A) It arises because job search is completely a supply side phenomenon in the labor market, and firms make no attempts to advertise for the vacancies they have. B) It arises because most of the workers shirk at work. C) It arises because it takes time for an unemployed worker to find a firm with a well-matched job vacancy. D) It arises because unemployment benefits encourage workers not to look for jobs.
The collapse of the subprime mortgage market increased the spread between Baa and default-free U.S. Treasury bonds. This is due to
A) a reduction in risk. B) a reduction in maturity. C) a flight to quality. D) a flight to liquidity.
In a large open economy like the United States, an increased government budget deficit which reduces national saving
A) reduces investment and improves the current account balance. B) reduces investment and reduces the current account balance. C) has no effect on investment, but reduces the current account balance. D) has no effect on either investment or the current account balance.
Suppose Louisa starts to use Facebook in order to connect with her school friends. She connects with some, but not all of them are on Facebook. If all her friends start using Facebook, it would lead to _____
a. a network externality b. allocative efficiency c. a socially optimum equilibrium d. a negative externality