If country A is well-endowed with natural resources but a small population while B is endowed with much labor but little land and few natural resources, then trade theory predicts that
a) A and B will not trade with each other, as neither can produce enough goods to export
b) A will gain more from trade than B
c) The price of labor-intensive goods will fall in country B after trade
d) Trade will occur, but wages will fall in country A
e) Wages and land values will rise in both countries if they trade
d) Trade will occur, but wages will fall in country A
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Which set of goals can, at times, conflict in the short run?
A) high employment and economic growth B) interest rate stability and financial market stability C) high employment and price level stability D) exchange rate stability and financial market stability
Government purchases are part of _______ and include _______
a. national income; federal and state government purchases b. GDP; federal, state, and local government purchases c. GDP; federal government purchases only d. national income; federal government purchases only e. national income; federal, state, and local government purchases
Profit-maximizing firms enter a competitive market when existing firms in that market have
a. total revenues that exceed fixed costs. b. total revenues that exceed total variable costs. c. average total costs that exceed average revenue. d. average total costs less than market price.
A change in which of the following variables would affect the cash flow for a firm?
A) changes in the nominal interest rate B) expected future profit C) changes in the real interest rate D) changes in expected inflation E) none of the above