The essential logic behind international trade is not different from that underlying trade among different states. Why, then, do we study international trade as a special subject?
What will be an ideal response?
There are at least three reasons.1. Domestic trade takes place under a single national government, whereas foreign trade always involves at least two governments.2. All trades within the borders of one country are carried out in their own currency, whereas trade across national borders involves at least two currencies.3. It is much easier for labor and capital to move about within a country than to move from one nation to another.
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Refer to the information provided in Figure 23.11 below to answer the question(s) that follow.
Figure 23.11Refer to Figure 23.11. Equilibrium aggregate output will increase to $250 million if the
A. multiplier increases to 8. B. MPC increases to 0.8. C. MPS increases to 0.8. D. all of the above.
According to Porter's Five Competitive Forces Model, similar products produced by different firms within the industry affects a firm's ability to raise prices far more than substitutable products produced outside the industry
Indicate whether the statement is true or false
The practice of "monetizing the debt" is traditionally feared because it is thought to cause
A) unemployment. B) inflation. C) a falling price level. D) a liquidity trap.
A major difference between a monopolist and a perfectly competitive firm is that
A) the monopolist is certain to earn economic profits. B) the monopolist's marginal revenue curve lies below its demand curve. C) the monopolist engages in marginal cost pricing. D) the monopolist charges the highest possible price that he can.