If Elizabeth can make 3 pies or bake 6 cakes per hour and Benjamin can make 2 pies or bake 8 cakes per hour, _____.
(A) Benjamin has the comparative advantage in making pies.
(B) Elizabeth has the comparative advantage in baking cakes.
(C) Benjamin should specialize in making pies.
(D) Elizabeth should specialize in making pies.
Ans: (D) Elizabeth should specialize in making pies.
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If the Fed promises to conduct a(n) ________ for several years, inflation expectation will be ________
A) contractionary fiscal policy; high B) expansionary monetary policy; high C) contractionary monetary policy; high D) expansionary fiscal policy; low
At a carnival roulette wheel, a player can either win $10, $30, or $80 . If it costs $50 to play, we would expect to see
a. A long line of players waiting to play b. No players for the game c. The carnival losing money per play d. All of the above
When the Fed practices contractionary monetary policy, the interest rate goes:
A. up, and the exchange rate will appreciate as a result. B. up, and the exchange rate will depreciate as a result. C. down, and the exchange rate will appreciate as a result. D. down, and the exchange rate will depreciate as a result.
Changes in what four variables will shift the long run aggregate supply curve?