Suppose an American worker can make 100 chairs or catch 900 fish per day. On the other hand, a Chilean worker, can make 40 chairs or catch 400 fish per day. The United States has an absolute advantage in the production of both fish and chairs. This means that the United States:
A. should produce only chairs and trade with Chile to get fish.
B. should produce only fish and trade with Chile to get chairs.
C. should take advantage of Chile by trading with them.
D. can produce more fish and chairs than Chile given the same amount of workers.
D. can produce more fish and chairs than Chile given the same amount of workers.
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Answer the following statement true (T) or false (F)
An expected future increase in the price of gasoline may
A) increase the demand for gasoline now. B) decrease the demand for gasoline now. C) increase the supply of gasoline now. D) make gasoline an inferior good.
If the nominal GDP is $500 billion and the money supply is $100 billion, the velocity of money is:
a. 500. b. 5.00 c. 2.50. d. 0.40.
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a. fall and AD increases. b. rise and AD increases. c. fall and AD decreases. d. rise and AD decreases.