When a country has the ability to produce a good or service at a lower opportunity cost than others, they:
A. have an absolute advantage.
B. have a comparative advantage.
C. are free-traders.
D. should remain self-sufficient.
B. have a comparative advantage.
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In reality, AD rarely ________; however, the economy performs as though it does when it ________
A) decreases; fluctuates with potential GDP B) increases; decreases at a pace much slower than potential GDP C) stagnates; increases at a pace much faster than potential GDP D) decreases; increases at a pace much slower than potential GDP E) decreases; increases at a pace much faster than potential GDP
The demand for gasoline in the short run is
A) elastic because people can easily switch to public transportation. B) inelastic because there are very few good substitutes for gasoline. C) perfectly inelastic because people have no choice but to buy gasoline. D) unit elastic because people tend to consume a stable amount of gasoline per period.
A decrease in personal taxes would shift the aggregate demand curve rightward
Indicate whether the statement is true or false
The "velocity" of money is
A) the ratio of real GDP to the real money supply. B) the real money supply divided by the real GDP. C) the money supply divided by the price level. D) the money supply multiplied by the price level.