A decrease in the average price level leads to a decrease in the purchasing power of wealth
a. True
b. False
Indicate whether the statement is true or false
False
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Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish
Which of the following is CORRECT? A) Homer has a comparative advantage in catching fish and Teddy has a comparative advantage in picking fruit. B) Homer has a comparative advantage in picking fruit and Teddy has a comparative advantage in catching fish. C) Homer has a comparative advantage in both catching fish and picking fruit. D) Teddy has a comparative advantage in both catching fish and picking fruit.
The long-run aggregate supply curve will shift to the right if
A) net exports decrease. B) the economy experiences technological change. C) there is a decrease in population. D) the economy experiences high levels of inflation.
Initially, workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad, so domestic shoe prices fall. At the same time, foreign consumers purchase more computers, raising the relative price of computers. As a result of these changes, wages in the shoe industry ________ and wages in the computer industry ________.
A. increase; increase B. increase; decrease C. decrease; decrease D. decrease; increase
If the U.S. has a comparative advantage in almonds relative to Japan, we would expect that
A. the U.S. would export almonds to Japan and Japan would export almonds to the U.S. B. Japan would export almonds to the United States. C. the U.S. would export almonds to Japan. D. None of these situations would take place.