Which of the following is true if a nation does not have an absolute advantage in producing any goods or service?
a) it cannot have a comparative advantage either
b) it will have a comparative advantage in the production of the good or device in which it has a lower opportunity cost
c) it will export raw materials and import finished products
d) no country will want to trade with this nation because it is not cost effective to do so
e) the international value of its currency will be fixed
Ans: b) it will have a comparative advantage in the production of the good or device in which it has a lower opportunity cost
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A rise in the price level ________ the buying power of money and ________ the quantity of real GDP demanded
A) does not affect; does not change B) raises; decreases C) does not affect; increases D) lowers; decreases E) lowers; increases
For the firm in the real intertemporal model with investment
A) depreciation occurs more quickly if the firm produces more output. B) depreciation takes place at a constant rate. C) depreciation can be slowed with more maintenance. D) depreciation is always 100%.
Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P. Suppose that a nationwide quota (of 20) is enforced so that more can be used in a war effort. What is the price?
a. 20 b. 40 c. 60 d. 80
Refer to the information provided in Figure 23.9 below to answer the question(s) that follow.
Figure 23.9Refer to Figure 23.9. As a result of an increase in investment by $20 million, aggregate expenditures shifts ________, ________ equilibrium output and equilibrium expenditure.
A. down; increasing B. down; not changing C. up; increasing D. down; decreasing