Which of the following would not result from all countries specializing according to the principle of comparative advantage?
a. The size of the economic pie would increase.
b. Worldwide production of goods and services would increase.
c. The well-being of citizens in each country would be enhanced.
d. Each country's production possibilities frontier would shift inward.
d
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All of the following statements are true about the real exchange rate, given by the relation = , EXCEPT
A) a greater change in P (domestic price) compared to a change in (foreign price) necessitates a rise in the nominal rate, , to keep the real rate unchanged. B) a pegged exchange rate system requires tight control of the money supply. C) there is a one-to-one correspondence between the real and nominal exchange rates. D) an expansionary monetary policy raises the real exchange rate. E) the real exchange rate would be the same as the nominal exchange rate only if the difference between domestic and foreign inflation rates is zero.
A relaxation of U.S. immigration laws and regulations would
a. further reduce wages in poorer countries b. turn some permanent resource differentials into temporary ones c. increase the demand for labor in the United States d. turn some temporary resource differentials into permanent ones e. increase the supply of labor in poorer countries
A "liberal" would most likely argue in favor of
a. tax increases when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary. b. tax cuts when fiscal restraint is necessary, and spending cuts when fiscal stimulus is necessary. c. tax cuts when fiscal stimulus is necessary, and spending cuts when fiscal restraint is necessary. d. spending increases when fiscal expansion is necessary, and tax increases when fiscal restraint is necessary.
Refer to the graph shown. When market supply shifts from S0 to S1, total producer revenue:
A. increases from $2,520 to $3,000. B. decreases from $3,000 to $2,520. C. increases from $1,260 to $1,500. D. decreases from $1,500 to $1,260.