If the autarky price of S (in terms of T) were lower in country A than in country B,
A) A has a comparative advantage in S.
B) B has a comparative advantage in T.
C) A has a comparative disadvantage in T.
D) All of the above.
D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
During a business cycle recession, it is very likely that real GDP will
A) be greater than potential GDP. B) be less than potential GDP. C) equal nominal GDP and equal potential GDP. D) exceed nominal GDP. E) equal nominal GDP but not equal potential GDP.
According to Baumol, Blinder, and Solow, recognition of the usefulness of markets
A. labels a person as an apologist (defender) of capital. B. extends to some socialist countries, for example, China. C. should make totally free markets good for any society. D. makes one a radical.
In the case of a technology spillover, internalizing a positive externality will cause the supply curve of an industry to
a. shift to the right. b. shift to the left. c. become more elastic. d. remain unchanged.