How should a country choose what to produce and sell?
a. It should choose to produce and sell items in which it has an absolute advantage.
b. It should concentrate on the highest-priced items it can afford to produce.
c. It should specialize in goods or services in which it has a comparative advantage.
d. It should focus on items associated with its cultural history and identity.
c. It should specialize in goods or services in which it has a comparative advantage.
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Flexible exchange rates, proving to be much ________ volatile than economists predicted, have led to ________ calls for a return to fixed exchange rates
A) less, few B) less, many C) more, few D) more, many
When wages rise:
A. neither the opportunity cost of an hour of leisure nor the quantity of labor supplied is likely to change. B. the opportunity cost of an hour of leisure declines. C. the quantity of labor supplied always declines. D. the opportunity cost of an hour of leisure increases.
What is the largest category in state government spending?
A. education B. public welfare C. highways D. police and correction
If all prices in the economy go up from one year to the next, the CPI index, using the previous year as the base would
A. be less than 100. B. be greater than 100. C. not be influenced since quantities have remained unchanged. D. not be determined since enough information is given.