Answer the next question on the basis of the following production possibilities tables for two countries, Latalia and Trombonia.Latalia's Production Possibilities ABCDEPork (tons)43210Beans (tons)05101520Trombonia's Production Possibilities ABCDEPork (tons)86420Beans (tons)06121824Assume that before specialization and trade, Latalia produced combination C and Trombonia produced combination B. If these two nations now specialize completely based on comparative advantage, the total gains from specialization and trade will be
A. 2 tons of pork and 4 tons of beans.
B. 4 tons of beans.
C. 4 tons of pork.
D. 1 ton of pork and 2 tons of beans.
Answer: B
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If the dollar appreciates,
a. imports to the United States become more expensive for foreigners. b. exports from the United States become more expensive for foreigners. c. imports become more expensive for U.S. citizens. d. exports from the United States become cheaper. e. the dollar will exchange for fewer units of a foreign currency.
The economist credited with pioneering the "new growth theory" is
A) Milton Friedman. B) Jia-Tzu Weng. C) Paul Romer. D) Julian Simon.
Many economists think that, in the long run, the economy tends to move toward
A. the natural or full-employment rate of unemployment. B. the natural or full-employment rate of inflation. C. a severe slump with high unemployment. D. an accelerating rate of inflation.
The total value of U.S. Treasury bonds outstanding equals
A) the federal government deficit. B) the federal government surplus. C) the federal government debt. D) the cyclically adjusted budget deficit.