Prices of European goods are rising faster than prices of similar goods in the United States. Consequently Europeans substitute American goods for European goods and the euro depreciates. This phenomenon is the basis of
A. Ricardo’s Law.
B. comparative advantage.
C. absolute advantage.
D. purchasing power parity.
Answer: D
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Statutory incidence of a tax deals with
A. the amount of revenue left over after taxes. B. the amount of taxes paid after accounting for inflation. C. the person(s) legally responsible for paying the tax. D. the amount of tax revenue generated after a tax is imposed.
What are the two ways that the government can use fiscal policy to replace spending in a recession?
A. By reducing interest rates or by cutting taxes B. By spending money on government projects or by increasing the money supply C. By spending money on government projects or by cutting taxes D. By spending money on government projects or by reducing interest rates
According to the international trade theory, a country should import goods in which it has an absolute advantage
a. True b. False Indicate whether the statement is true or false
The average price level is measured by
a. the price of oil. b. the rate of inflation. c. the nominal interest rate. d. the GDP deflator or the CPI.