Trade enhances the economic well-being of a nation in the sense that
a. both domestic producers and domestic consumers of a good become better off with trade, regardless of whether the nation imports or exports the good in question.
b. the gains of domestic producers of a good exceed the losses of domestic consumers of a good, regardless of whether the nation imports or exports the good in question.
c. trade results in an increase in total surplus.
d. trade puts downward pressure on the prices of all goods.
c
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An examination of the Ricardian model of comparative advantage yields the clear result that trade is (potentially) beneficial for each of the two trading partners since it allows for an expanded consumption choice for each
However, for the world as a whole the expansion of production of one product must involve a decrease in the availability of the other, so that it is not clear that trade is better for the world as a whole as compared to an initial situation of non-trade (but efficient production in each country). Are there in fact gains from trade for the world as a whole? Explain.
Which of the following policies have been suggested as ways to boost the growth of productivity?
A) tax cuts to boost saving and investment B) reducing the budget deficit by raising taxes and cutting expenditures C) increasing public investment in education D) redesigning and scaling back the regulatory apparatus of the federal government E) all of the above
When the Fed raises the margin requirement on stock purchases, the price of stocks generally rises
Indicate whether the statement is true or false
When per capita real GDP is increasing, real output is growing
a. more rapidly than prices. b. more rapidly than population. c. less rapidly than prices. d. less rapidly than population.