A country that does NOT engage in trade can benefit from trade only if
A) pre-trade and free-trade relative prices are not identical.
B) it employs a unique technology.
C) it has an absolute advantage in at least one good.
D) its wage rate is below the world average.
E) pre-trade and free-trade relative prices are identical.
A
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Picture an economy that is in general equilibrium. What would happen if the natural rate of unemployment were to experience an increase?
A) according to the Phillips curve, the ensuing negative unemployment gap would exert inflationary pressures B) according to Okun's Law, the ensuing negative unemployment gap would be consistent with a positive output gap C) according to the AD-AS framework, the LRAS curve would shift to the left and the ensuing positive output gap would be closed by subsequent leftward shifts in the AS curve to higher equilibrium levels of inflation D) all of the above E) none of the above
What would you expect the cross price elasticity of iPods and online music downloads? Explain your answer
What will be an ideal response?
For an individual's supply curve of labor to be backward bending:
a. the substitution effect must be greater than the income effect. b. the substitution effect must be equal to the income effect. c. the substitution effect must be less than the income effect. d. is an impossibility.
If interest rates in the U.S. increases relative to interest rates in Europe:
A. the price of U.S. assets should increase. B. the supply of euros on the foreign exchange market would increase. C. the demand for dollars on the foreign exchange market would increase. D. all of the answers given are correct.