Comparative advantage is the ability, compared with another producer
A) to produce more of a product with the same resources.
B) to use fewer inputs to produce the same amount of a product.
C) to produce a higher-quality product with fewer resources.
D) to produce an additional unit of a product at lower opportunity cost.
Answer: D
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Natural resources should be left in the ground
a. if their discounted future value exceeds their current value b. so future generations will be able to use them c. until companies agree to restore land after mining d. because we may run out e. economists have no good way to analyze this question
Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
A good that takes up a very large percentage of the consumer's budget will tend to have
a. an elastic demand b. a perfectly elastic demand c. an inelastic demand d. an upward-sloping demand curve e. very many substitutes
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and current international transactions balance in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and current international transactions balance becomes more negative (or less positive). b. Real GDP rises and current international transactions balance becomes more negative (or less positive). c. Real GDP and current international transactions balance remain the same. d. Real GDP rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.