Explain carefully why the assumption of identical technology worldwide eliminates the classical basis for international trade
What will be an ideal response?
In the classical model, differences in technology between the two countries lead to differences in autarky prices. If one were to replace that assumption with the HO assumption of identical technologies, the autarky prices would be identical, and there would be no reason for trade to begin between the two countries.
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The present value of $300,000 in 12 years at 4 percent interest is approximately:
A. $312,451. B. $187,379. C. $427,126. D. None of these statements is true.
China's one child policy
a. Caused the share of young people to rise b. Prematurely aged the Chinese labor force c. Lowered the saving rate d. all of the above e. none of the above
The accompanying figure shows Avery's weekly production possibilities curve for scarves.
For Avery, the opportunity cost of making a red scarf is:
A. decreasing. B. 1 blue scarf. C. increasing. D. zero.
Dividends are
A. corporate profits distributed to shareholders. B. promissory notes issued by corporations. C. government profits distributed among bondholders. D. capital gains realized by stockholders.