Some nations that seek to produce all of their own needs face the problem that
A. they can deplete their natural resources faster as a result.
B. some industries are too small to be efficient if restricted to their domestic markets alone.
C. the opportunity cost of producing some of their own goods is higher than that of trading with others for them.
D. all of the above are true.
D. all of the above are true.
they can deplete their natural resources faster as a result, some industries are too small to be efficient if restricted to their domestic markets alone, and the opportunity cost of producing some of their own goods is higher than that of trading with others for them.
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Using the interest rate as a measure of the opportunity cost of holding money, the demand for money curve
A) slopes upward with respect to the rate of interest. B) is not affected by the price level. C) slopes downward with respect to the rate of interest. D) is vertical.
The theory of purchasing power parity implies the real exchange rate between two countries is:
A. flexible. B. greater than one. C. equal to one. D. less than one.
The following is budget information for a hypothetical economy. All data are in billions of dollars.YearGovernment SpendingTax RevenuesGDP1$1,100$1,000$10,00021,2501,40010,20031,4501,45010,50041,6001,50010,90051,8001,55011,200Refer to the above data. In which year is there a balanced budget?
A. Year 1 B. Year 2 C. Year 3 D. Year 4