A nation should specialize in the production of the product for which it has a(n):
a. absolute advantage.
b. exchange rate.
c. specialization.
d. comparative advantage.
e. terms of trade.
d
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If the Fed wants to decrease the money supply, it can:
A. Increase the money multiplier. B. Decrease the discount rate. C. Sell government bonds. D. Decrease the minimum reserve ratio.
An activity performed by commercial banks that is not performed by insurance companies is
A) functioning as financial intermediaries. B) creating financial obligations against themselves. C) accepting deposits and offering checking accounts. D) allocating financial resources between borrowers and lenders.
The output effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product. B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product. C. make labor less expensive as an input, leading firms to switch to labor as an input. D. make labor more expensive as an input, leading firms to switch to other inputs.
Refer to the below graph of the market for low-skilled labor. Sd is the supply of domestic resident workers, and St is the total supply of labor including undocumented workers. If there are illegal immigrants in the market, how many legal residents will be employed?
A. 15M
B. 120M
C. 135M
D. 22M