In the globalized model, the eventual equivalency of domestic and world prices follows from the:
A. law of one price.
B. law of demand.
C. law of comparative advantage.
D. law of supply.
Answer: A
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Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Both individuals will be better off if
A) Tom trades sandwiches in exchange for eggs. B) Jerry trades sandwiches in exchange for eggs. C) they trade, no matter who trades sandwiches and who eggs. D) they don't trade.
The United States gained significant strength globally in manufacturing production during the Civil War (1861–1865)
Indicate whether the statement is true or false
The DeBeers Diamond Company, which owns most of the South African diamond production, has market power over the diamond trade. This market power was obtained through: a. illegal means
b. control of a scarce resource. c. patent protection. d. government licensing.
The Fed's sale of U.S. government securities in its open market operations constitutes
a. a restrictive policy because it lowers the amount of total reserves in the banking system. b. a restrictive policy because it raise the amount of required reserves in the banking system. c. an expansionary policy because it raises the amount of total and excess reserves in the banking system. d. an expansionary policy because it raises the amount of excess reserves and lowers the amount of required reserves in the banking system. e. an expansionary policy because it raises the amount of required reserves in the banking system.