Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that:
A. there is no reason for them to trade services.
B. Madison should trade her accounting services for Mason's painting services, so long as
Madison is relatively more efficient at accounting services.
C. Madison should trade her accounting services for Mason's painting services, so long as
Madison is relatively more efficient at painting.
D. Madison has the comparative advantage in both services.
B. Madison should trade her accounting services for Mason's painting services, so long as
Madison is relatively more efficient at accounting services.
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In a period of rapid, unexpected inflation, resources can be lost
A) when firms invest in research and development instead of forecasting inflation. B) when firms use resources to forecast inflation. C) because rapid inflation almost always turns into a hyperinflation. D) Both answers B and C are correct.
To signal to your insurance company that you are a low risk individual, you should
a. Accept an insurance policy with a high deductible b. Accept an insurance policy with a low deductible c. Accept an insurance policy with no co-payments d. None of the above
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). c. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). d. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. Real GDP and net nonreserve-related international borrowing/lending remain the same.
In a certain large city there are two firms that supply concrete. The concrete sold by the first firm is indistinguishable from the concrete sold by the second firm. Is the market competitive?