If a country has a lower opportunity cost in producing a good than its trading partners, then it has:
A. A comparative advantage in producing the good.
B. Favorable terms of trade in producing the good.
C. An absolute advantage in producing the good.
D. Lower labor costs in producing the good.
A. A comparative advantage in producing the good.
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What are the Fed's three policy tools?
What will be an ideal response?
A price index:
A. measures how much the cost of a market basket has risen or fallen relative to the cost in a base time period. B. summarizes the changes in the cost of living for only rural consumers. C. allows us to see clearly the changes in the cost of a market basket daily. D. is generally only used with consumer goods and services
A country may gain a temporary comparative advantage if it:
A. remains a political ally to all. B. remains self-sufficient until it stockpiles enough inventory to supply the world. C. is the first to discover and implement a new technology or production process. D. All of these are true.
The inflation rate has been 7 percent for 10 years, and the nominal interest rate has been 6 percent during this same time period. Suddenly, the public anticipates that the inflation rate will be 6 percent this coming year. The real rate of interest for the coming year is
A. 0 percent. B. 13 percent. C. 2 percent. D. 4 percent.