What is meant by "gains from specialization"?
What will be an ideal response?
Gains from specialization are the economic gains that the society can obtain by having some individuals, regions or countries specialize in the production of certain goods and services.
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A local electricity-generating company has a monopoly that is protected by an entry barrier that takes the form of
A) a perfectly inelastic demand curve. B) economies of scale. C) control of a key raw material. D) network externalities.
Consider a small open economy that is in equilibrium with a current account surplus
(a) Draw a diagram showing this situation. (b) Now suppose that future income increases. Show what happens in your diagram. What happens to the world real interest rate and the equilibrium quantities of saving, investment, and the current account balance? (c) Repeat parts (a) and (b) for the case of a large open economy, showing a situation in which the home country initially has a current account surplus. Draw a diagram and describe how the rise in future income in the home country affects all four variables (the world real interest rate and the equilibrium quantities of saving, investment, and the current account balance) in both countries.
In the 1980s, the federal government gradually ________ interest-rate ceiling on deposits at commercial banks and thrift institutions, which has ________ the costs of inflation
A) imposed, lowered B) imposed, reduced C) lifted, lowered D) lifted, reduced
An economy doubles in size every 35 years if it maintains a steady annual growth rate of about __________ percent
A) 4.0 B) 2.8 C) 3.5 D) 2.0