A country has an absolute advantage over another in the production of widgets if it can produce
a. widgets using smaller quantities of resources than can the other country.
b. more widgets than can the other country.
c. widgets more efficiently than can the other country.
d. widgets at a lower opportunity cost than can the other country.
a
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Which of the following is a price floor?
A) rent controls B) minimum wage rates C) a freeze on upward-moving gasoline prices D) college tuition caps
When the inflation rate of a country is high over a lengthy time period,
a. the year-to-year variability in the rate of inflation is generally small. b. the year-to-year variability in the rate of inflation is generally large. c. decision makers will be able to forecast future rates of inflation accurately. d. there is no reason to believe that the inflation will exert harmful side effects on real output and the prosperity of the country.
Suppose that velocity rises while the money supply stays the same. It follows that
a. P x Y must rise. b. P x Y must fall. c. P x Y must be unchanged. d. the effects on P x Y are uncertain.
Jim transfers money from his money market account to his savings account. This action
a. reduced M1 and increases M2. b. increases M1 and reduces M2. c. has no effect on M1 or M2. d. increases M1 and M2.