The economy experiences a decrease in the price level and an increase in real domestic output. Which is a likely explanation?
A. National income abroad has increased.
B. Consumer incomes and the quantity of labor have decreased.
C. Raw material prices and wage rates have decreased.
D. The prices of imported resources have increased.
Answer: C
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The difference between GDP and disposable income is
A) net taxes. B) unplanned investment spending. C) national income. D) actual investment spending.
One result of asymmetric information in health insurance markets is:
a. adverse selection. b. an optimal number of insurance policies sold. c. externalities in consumption. d. the principal-agent problem. e. a low marginal benefit of additional information for the buyer of insurance.
The capital account balance is equal to the
A. Current account balance plus U.S. purchases of foreign assets. B. Current account balance plus foreign purchases of U.S. assets. C. U.S. purchases of foreign assets minus foreign purchases of U.S. assets. D. Foreign purchases of U.S. assets minus U.S. purchases of foreign assets.
What is the source of comparative advantage in the Heckscher-Ohlin model?
What will be an ideal response?