Absolute advantage is a comparison among producers based on productivity.
Answer the following statement true (T) or false (F)
True
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If people expect the dollar to depreciate, then the
A) demand for dollars will decrease, the supply of dollars will increase, and the exchange rate will fall. B) demand for dollars will decrease, the supply of dollars will not change, and the exchange rate will fall. C) supply of dollars will increase, the demand for dollars will not change, and the exchange rate will fall. D) demand for dollars will increase, the supply of dollars will decrease, and the exchange rate will rise.
Explain two reasons why the Fed does not have complete control over the level of bank deposits and loans. Explain how a change in either factor affects the deposit expansion process
What will be an ideal response?
Assume that the central bank sells government securities in the open market. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and nominal value of the domestic currency falls. b. The real risk-free interest rate falls and nominal value of the domestic currency falls. c. The real risk-free interest rate and nominal value of the domestic currency remain the same. d. The real risk-free interest rate rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following restrictions implies that saving and investment are equal for a closed economy?
a. Private saving is equal to zero. b. Public saving is equal to zero. c. The economy's government is running neither a surplus nor a deficit. d. No restriction is necessary; saving and investment are equal for all closed economies.