If a nation has an absolute advantage in the production of a good,
A. it can produce that good at a lower opportunity cost than its trading partner.
B. it can produce that good using fewer resources than its trading partner.
C. it will specialize in the production of that good and export it.
D. all of these.
Answer: B
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All transaction deposits are included in
A) M1 only. B) M2 only. C) both M1 and M2. D) savings balances only.
The amount of a good that must be given up to produce another good is the concept of:
a. scarcity. b. specialization. c. trade. d. efficiency. e. opportunity cost.
At an output level above the profit-maximizing level, for a perfectly competitive firm, a reduction in output will:
a. reduce total revenue more than total cost. b. reduce total cost more than total revenue. c. increase total revenue more than total cost. d. increase total cost more than total revenue. e. decrease total revenue and total cost by the same amount.
In the graph showing aggregate demand and aggregate supply after a negative supply shock, we can see that high energy prices in the late 1970s caused ______.
a. a leftward shift in the aggregate demand curve
b. a rightward shift in the aggregate demand curve
c. a leftward shift in the short-run aggregate supply curve
d. a rightward shift in the short-run aggregate supply curve