Suppose that, given the same number of workers, the United States can produce five times as many computers or 10 times as many airplanes as Mexico. Which of the following statements is true?
A. The United States has an absolute advantage in the production of computers, and Mexico has an absolute advantage in the production of airplanes.
B. The United States has an absolute advantage in the production of airplanes, and Mexico has an absolute advantage in the production of computers.
C. The United States has an absolute advantage in the production of both airplanes and computers.
D. Mexico has an absolute advantage in the production of both airplanes and computers.
C. The United States has an absolute advantage in the production of both airplanes and computers.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
There has been an increase in the demand for chicken. This change can be shown graphically as a:
A. shift in the demand curve to the left. B. movement along the demand curve to the left. C. shift in the demand curve to the right. D. movement along the demand curve to the right.
The precautionary demand for holding money arises because
A. expected transactions are completed more easily with debit cards than with credit cards. B. people want be able to make unexpected purchases or to meet emergencies. C. credit cards charge low interest rates, which makes money more attractive than credit. D. people would rather hold money in the form of time deposits than in the form of hard currency.
As compared to production alternative D, the choice of alternative C would:
What will be an ideal response?