Each trading nation can gain by specializing in producing those things for which it is a low-opportunity cost producer. This statement best describes the implications of the
a. free rider problem.
b. law of comparative advantage.
c. infant-industry argument.
d. law of diminishing marginal returns.
B
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Fred purchases a bond, newly issued by the Big Time Corporation, for $10,000. The bond pays $400 to its holder at the end of the first, second, and third years and pays $10,400 upon its maturity at the end of four years. The principal amount of this bond is ________, the coupon rate is ________, and the term of this bond is ________.
A. $10,000; 4%; four years B. $10,000; $400; 4% C. $400; 40%; four years D. $10,400; 4%; four years
The above figure shows the market for hamburger. Which figure shows the effect of an announcement by the U.S. Food and Drug Administration (FDA)that eating hamburger causes early death?
A) Figure A B) Figure B C) Figure C D) Figure D
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real GDP and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. Real GDP falls
and net nonreserve international borrowing/lending balance becomes more negative (or less positive). b. Real GDP rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. Real GDP falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. Real GDP falls and net nonreserve international borrowing/lending balance falls. e. There is not enough information to determine what happens to these two macroeconomic variables.
The international poverty line at $1.90 a day at purchasing power parity means that in each country the poverty line is the amount that will allow you to buy a basket of goods equivalent to what $1.90 would buy:
A. in the United States. B. in the average economy of all the countries that use the index. C. in the richest of the countries that uses the index. D. in the poorest of the countries that uses the index.