China has a comparative advantage in textiles and an absolute advantage in both textiles and radios. Japan has a comparative advantage in radios. According to this scenario
A. China should export textiles and import radios.
B. China should export both radios and textiles.
C. Japan should export textiles and import radios.
D. Japan should import both radios and textiles.
Answer: A
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The most economically efficient exchange rate system is one in which
A) residents of a nation can reallocate their resources at minimal costs. B) the central bank in a nation requires the least intervention in domestic money markets. C) the central bank in a nation requires the least intervention in foreign exchange markets. D) real income fluctuations are minimized.
Open-market operations are:
A. sales or purchases of government securities, by the Fed, to or from banks on the open market. B. regulations that set the minimum fraction of deposits banks must hold in reserve. C. operations that allow any bank to borrow reserves from the Fed at a special interest rate, called the discount rate. D. the purchase and sale of financial instruments on the open market.
If you were a government official that wanted to raise the equilibrium price of milk, which of the following actions would you take?
a. Take milk from government storage and sell it. b. Encourage farmers to produce more milk. c. Subsidize purchases of dairy equipment. d. Encourage farmers to produce less milk.
If, with one unit of labor, the U.S. can produce 20 units of computer software and 10 units of computer hardware, and China can produce 6 units of software and 6 units of hardware, then trade can make
A. both better off. B. the U.S. better off but not China. C. neither better off. D. China better off but not the U.S.