Specialization in goods and services one can produce at a low cost makes it possible for trading partners to produce a larger joint output. This is called
a. the law of absolute advantage.
b. the law of demand.
c. the law of production possibilities.
d. the law of comparative advantage
d. the law of comparative advantage
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Suppose the Fed wants to fix the U.S. dollar/Mexican peso rate at 11 pesos per dollar under a fixed exchange rate policy. If the exchange rate falls to 10 pesos per dollar, the Fed can
A) buy dollars. B) sell dollars. C) attempt to freeze all sales of dollars. D) any of the above actions could take place.
Assuming that the marginal utility of wealth diminishes implies that
A) you have more total utility with $100 than with $1,000. B) you have more total utility with $1,000 than with $1,001. C) an additional dollar increases your total utility more if you only have $100 than if you have $1,000. D) an additional dollar does not increase your total utility regardless of your wealth.
How does slow price adjustment, as assumed in Keynesian models, result in real economic variables being affected by nominal variables?
What will be an ideal response?
A factory is an example of:
a. capital. b. scarcity. c. an enterprise. d. land resources. e. output.