When a change in the price level leads to a change in the quantity of net exports demanded, it is called the:
What will be an ideal response?
international trade effect.
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The original comparative advantage model that used the relative abundance of factors of production to explain comparative advantage assumed that countries:
a. employed all four factors of production; land, labor, capital, and entrepreneurship. b. employed only two factors of production; labor and capital. c. employed only two factors of production; land and entrepreneurial ability. d. worked with a fixed capital stock. e. were free to vary their employment of only one factor of production; labor.
Which of the following is a false statement about absolute and comparative advantage?
a. Comparative advantage is the basis for gains from trade. b. It is possible for one country to have the absolute advantage in all goods. c. It is possible for one country to have the comparative advantage in all goods. d. To find comparative advantage, you need to consider opportunity cost. e. All of these statements are true.
In a monopolistically competitive industry in long-run equilibrium
A. price equals marginal cost for each firm. B. each firm is making a normal profit. C. each firm is producing the output at which long-run average cost is at its minimum point. D. all of the above E. none of the above
Between 1998 and 2001 the federal budget
A. was in balance. B. was running steadily declining deficits. C. was running surpluses. D. ran deficits the first two year that turned into surpluses the last two years.