Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. If these two countries specialize and trade according to their comparative advantage
A. all individuals in both countries will benefit.
B. Greece will specialize in and export cars.
C. Germany will produce more cars than in the absence of trade.
D. Germany will produce more fish than in the absence of trade.
Ans: C. Germany will produce more cars than in the absence of trade.
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With reference to the difference between a change in demand and a change in quantity demanded, which of the following is TRUE?
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a. When it has many close substitutes b. In the long-run c. When it has many complements d. None of the above
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Which of the following is true of the Golden Age of fiscal policy of the 1960s? a. Fiscal policy was used to prevent output from expanding in 1964
b. Lyndon B. Johnson cut income tax rates to reduce inflationary pressures in the economy c. A tax cut was introduced to increase savings and unemployment. d. A tax cut increased disposable income and consumption. e. The unemployment rate rose by 5 percent for the first time in seven years