The principle of comparative advantage
A. applies only when the gold standard is in effect.
B. is the basic reason that the United States has been running trade deficits.
C. states that it is advantageous to export more than you import.
D. states that total output is greatest when each product is made by the country that has the lowest opportunity cost.
D. states that total output is greatest when each product is made by the country that has the lowest opportunity cost.
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Monetary policy will have a large income effect provided the
A) IS curve is flat. B) LM curve is steep. C) IS curve is steep. D) LM curve is flat.
The government agency that provides insurance for all checkable deposits up to $100,000 in banks choosing its protection is the:
a. Federal Deposit Insurance Corporation. b. Federal Reserve. c. Office of Management and Budget. d. Treasury. e. Securities and Exchange Commission.
Suppose that Home is a capitalabundant country. When Home trades with Foreign, a laborabundant country, the HO model predicts that the price of:
a. the laborintensive good will rise in Home. b. the laborintensive good will rise in Foreign. c. the capitalintensive good will rise in Foreign. d. the capitalintensive good will fall in Home.
A chart of the ratio of national debt to GDP from 1915 to 2014 would show
A. significant increases from 1945 to 1975. B. significant increases during World Wars I and II. C. a larger value in 1975 compared to 1945. D. significant increases from 1995 to 2003.