Why do both developed and less-developed countries protect clothing and textiles heavily?
What will be an ideal response?
For developed countries, comparative advantage has been lost in these labor-intensive industries. For less-developed countries, these are major export sectors that also have a significant domestic market share, and so it is desirable to protect domestic markets while exporting these goods (in which they have a comparative advantage).
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In the long run, higher government budget deficits will
A) lead to a redistribution of real GDP from privately produced goods and services to government produced goods and services. B) lead to a redistribution of real GDP from government produced goods and services to privately produced goods and services. C) cause the price level to go down on government goods but not on private goods. D) lead to a reduction in the amount of goods and services produced by the government and private sector.
If long-run costs are plotted on the vertical axis and the quantity of output is plotted on the horizontal axis, a line that is perfectly horizontal implies:
a. constant returns to scale. b. economies of scale. c. diseconomies of scale. d. inefficient use of capital. e. inefficient use of labor.
Currency is included in
A. M2 only. B. M3 only. C. M1 and M2 only. D. M1, M2, and M3.
It is impossible to find a direct relationship between unemployment and social problems such as illness, crime, and divorce.
Answer the following statement true (T) or false (F)