Refer to the data below. Assume that Wat originally produced rice and corn at combination C and that Xat originally produced combination B. If the nations now fully specialized based on comparative advantage, the total gains from specialization and trade are:
Answer the following question based on the data provided in the tables below for two hypothetical nations, Wat and Xat. The nations have the production possibilities for rice and corn given in the following table:
A. 25 units of rice and 25 units of corn
B. 50 units of rice and 50 units of corn
C. 100 units of rice and 100 units of corn
D. 100 units of rice and 150 units of corn
B. 50 units of rice and 50 units of corn
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Suppose the economy has no income taxes or imports. How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?
What will be an ideal response?
The budget deficit increases during wars and recessions
Indicate whether the statement is true or false
With moral hazard, fair insurance contracts are not viable because
a. individuals' aversion to risk is reduced. b. insurance company's administrative costs are increased. c. individuals fear unscrupulous agents. d. probabilities of loss are increased over what is expected.
In a market system, the answer to the "for whom to produce" economic question is that goods are allocated to those with the willingness and ability to pay, as expressed through market demand
Indicate whether the statement is true or false