If two countries find that neither has a comparative advantage in the production of any good or service:
A) it must be true that one country produces everything more efficiently than the other country.
B) each country will find it beneficial to trade.
C) it is impossible for them to benefit from trade.
D) they should still specialize and trade.
Ans: C) it is impossible for them to benefit from trade.
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Answer the next question based on the following data. All figures are in billions of dollars.Government purchases$10Consumption115Gross investment35Consumption of fixed capital7Exports11Imports14 This nation's GDP is ________.
A. $163 billion B. $164 billion C. $157 billion D. $171 billion
The circular flow shows that
A) aggregate production equals aggregate expenditure. B) aggregate expenditure is less than aggregate income. C) GDP equals aggregate income. D) Both answers A and C are correct.
According to the theory of rational expectations,
a. workers' experience tells them that government action to lower unemployment will not affect inflation b. consumers and investors generally behave so that rationally formed government attempts to stimulate aggregate demand have their desired effects c. policy goals can be achieved more easily in the short run than in the long run d. workers' wage demands include anticipated inflation e. expansionary monetary policy will lead to permanent interest rate declines
In the long run in a perfectly competitive industry
A) opportunity costs are negligible. B) economic profits will be zero. C) some firms will be experiencing economic losses. D) only entrepreneurs will earn more than their opportunity costs.