Explain how a country with no absolute advantage can gain from trade
What will be an ideal response?
Even if a country cannot produce absolutely more of a good, it can still have a comparative advantage. This means that it is relatively better at producing a given good. Thus if it specializes in producing the good that it produces at a relatively lower cost and trades for goods that it can only produce at a relatively higher cost, it will gain from trade.
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When Country X has high economic growth, this country has
A) a high level of real Gross Domestic Product (GDP). B) a high level of per capita real Gross Domestic Product (GDP). C) a large increase in per capita real Gross Domestic Product (GDP). D) a large increase in personal income.
The process by which new ideas spread from the original company to other businesses in the economy is called
A. innovative revolution. B. patent dispersion. C. technological diffusion. D. Moore's process.
Under the assumption of rational expectations, people's expectations about the economy are an important determinant of
A. the long-run aggregate supply curve. B. the short-run aggregate supply curve. C. the short-run aggregate demand curve. D. the long-run aggregate demand curve.
The "currency" of the IMF is
A. the IMF Dollar. B. the Special Drawing Right. C. gold. D. the International Currency Unit.