Gains from trade can be realized if each country specializes in the production of a good in which it has a comparative advantage
a. True
b. False
Indicate whether the statement is true or false
True
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Steady-state consumption per worker is
A) larger in the short run than in the long run. B) less than steady-state investment per worker. C) less than steady-state saving per worker. D) steady-state production per worker minus steady state investment per worker.
A technological breakthrough lowers the cost of manufacturing DVDs. As a result, the market changes to a new equilibrium because of a(n):
a. upward movement along the demand curve for DVDs. b. rightward shift in the demand curve for DVDs. c. rightward shift in the supply curve for DVDs. d. shortage of DVDs.
If the fractional reserve system did not exist,
a. the banking system could not create money. b. there would be no effect on the ability of the banking system to create money. c. banks would loan out its required reserves. d. banks would be highly susceptible to bank runs. e. the banking system would realize the money multiplier.
In a given year the nominal growth rate is 7% with inflation and population growth rates of 2% and 1.2% respectively, then real growth rate of GDP per capita is:
A. 3.8%. B. 5.0 %. C. 5.8%. D. 7.0 %.