The central idea behind comparative advantage is that a nation should
A. specialize in the product that it can produce with the lowest opportunity cost.
B. compare its market economy with other nations.
C. use money as a medium of exchange to facilitate specialization and trade.
D. pursue investment in capital goods as a means of stimulating economic growth.
Answer: A
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Why have many developing countries pursued industry at the expense of agriculture? What has been the result of this strategy?
What will be an ideal response?
Which of the following is an example of an intermediate good?
a. Sugar bought by a bakery b. Sugar bought by a family c. Furniture bought by a family d. Burgers bought at a restaurant e. Medicines bought at a pharmacy
With careful planning, we can usually get something that we like without having to give up something else that we like
a. True b. False Indicate whether the statement is true or false
Which of the following statements about inflation is correct?
a. Evidence from studies indicates that, in U.S. newspapers, inflation is mentioned less frequently than other economic terms, such as unemployment and productivity. b. People believe the inflation fallacy because they tend to believe too strongly in the principle of monetary neutrality. c. Nominal incomes are determined by nominal factors; they are not affected by real factors. d. Inflation does not in itself reduce people's real purchasing power.