A nation's producers can compete effectively with imports from other nations if:
a. they have an absolute advantage in the production of all goods.
b. they have an abundance of unskilled workers.
c. they have a high opportunity cost of production.
d. the relative price of exports to imports is high.
e. the labor cost per unit of output is low.
Ans: e. the labor cost per unit of output is low.
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The production possibilities curve represents the set of all
A) nonlinear forms of production in the economy. B) combinations of goods and services that can be used in the production of other goods and services. C) factors of production that can be used to manufacture goods and services. D) feasible combinations of goods that the economy can produce given that a nation's resources are fully employed.
If the exchange rate rises, the quantity of dollars demanded
A) increases and there is movement down along the demand curve for dollars. B) decreases and there is movement down along the demand curve for dollars. C) decreases and there is movement up along the demand curve for dollars. D) increases and there is movement up along the demand curve for dollars. E) does not change.
By itself, an increase in exports
A) increases GDP. B) decreases GDP. C) means imports decrease by the same amount. D) can either increase or decrease GDP, depending on whether the exports are durable or nondurable.
A surplus exists in a market if
a. there is an excess demand for the good. b. quantity demanded exceeds quantity supplied. c. the current price is above its equilibrium price. d. All of the above are correct.