Assume that Chile can produce one pound of coffee or 40 pillows in an hour, and that the United States can produce one pound of coffee or 20 pillows in an hour,
a. the terms of trade should be between 20 and 40 pillows per pound of coffee, and the United States should produce both coffee and pillows
b. the terms of trade should be between 20 and 40 pillows per pound of coffee, and Chile should produce pillows
c. the terms of trade should be between 20 and 40 pillows per pound of coffee, and Chile should produce coffee
d. the terms of trade should exceed 40 pillows per pound of coffee, and Chile should produce coffee
e. no trade will occur, since the United States does not have an absolute advantage in producing either good
B
You might also like to view...
Sovereign debt crises are triggered ________
A) by innovations in subprime real estate markets B) when a country's debt-to-GDP ratio becomes excessively high C) when austerity measures cause a sharp fall in the supply of government bonds D) by the adoption of a common currency, such as the euro
Which of the following is assumed to be constant in the quantity theory of money?
a. The money supply b. Real GDP c. The price level d. The velocity of money e. Nominal GDP
In 2015 the Japanese adult non-institutionalized population was 110.7 million, the labor force was 66 million, and the number of people employed was 63.7 million. According to these numbers, the Japanese labor-force participation rate and unemployment rate were about
a. 57.5% and 2.1% b. 57.5% and 3.5% c. 59.6% and 2.1% d. 59.6% and 3.5%
What type of relationship does expected profitability have with respect to Investment spending?
A. Negative B. Positive C. Indirect D. Constant