The Heckscher-Ohlin model basically states that countries will specialize and trade those goods in which they have comparative advantage
Indicate whether the statement is true or false
FALSE
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Loopholes increase the efficiency of the tax system by making taxpayers better off
a. True b. False Indicate whether the statement is true or false
Describe the lemons problem.
What will be an ideal response?
For this question, assume that policy makers are pursuing a fixed exchange rate regime. Now suppose that households decide to increase consumption because of, for example, an increase in consumer confidence. Given this information, we would expect which of the following to occur?
A) an increase in the domestic interest rate B) a reduction in E C) an increase in E D) an increase in investment E) none of the above
Whenever total planned expenditures differ from real GDP
A. unplanned inventories will change. B. tax revenues will move the economy back to equilibrium. C. government spending will adjust. D. unplanned inventories will remain unchanged.