The law of comparative advantages explains why
a. advanced nations will not trade with less-developed countries.
b. an advanced nation will not trade with other countries.
c. less-developed countries only trade among themselves.
d. nations trade with each other, regardless of their relative levels of economic development.
e. nations erect trade barriers.
d
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A deficit in our balance of payments causes the dollar to __________, which causes the deficit to __________
A) appreciate; increase B) appreciate; decrease C) depreciate; increase D) depreciate; decrease
If the economy automatically tends toward full employment, then government stabilization policy
A. must be constantly in force. B. will be necessary only in recessions. C. will be necessary only in inflationary periods. D. will not be necessary.
The aggregate demand curve slopes downward because a rise in inflation? leads:
A. the fiscal policy authorities to impose contractionary fiscal measures. B. the monetary policy authorities to raise real interest rates. C. the monetary policy authorities to impose credit controls. D. consumers and businesses to increase autonomous expenditures.
Local banks could pass the risk involved in holding mortgage debts on to an investor with a higher risk tolerance using:
A. leveraged investments. B. government-backed securities. C. leveraged securities. D. mortgage-backed securities.