Nation Alpha has a comparative advantage in product X and nation Beta has a comparative advantage in product Y. Trade in the two products will only benefit the two nations if:
A. The exchange ratio of X for Y is fixed
B. The terms of trade increase in both nations
C. There is excess capacity in both economies
D. The prices charged for X and Y reflect their domestic opportunity costs
D. The prices charged for X and Y reflect their domestic opportunity costs
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What is NOT an interest bearing asset of commercial banks?
A. required reserves.
B. securities.
C. loans.
D. All of the above
You earned $30,000 in 2007, and your salary rose to $80,000 in 2016. If the CPI rose from 82 to 202 between 2007 and 2016, which of the following is true?
A) The purchasing power of your salary increased between 2007 and 2016. B) There was deflation between 2007 and 2016. C) The purchasing power of your salary fell between 2007 and 2016. D) The purchasing power of your salary remained constant between 2007 and 2016.
The opportunity cost of holding money is
A) zero. B) the inflation rate. C) the real interest rate. D) the nominal interest rate.
Which of the following describes how U.S. exports and imports have changed since 1960?
a. Both exports and imports have risen sharply. b. Exports have risen, but imports have fallen. c. Exports have fallen, but imports have risen. d. Both exports and imports have fallen slightly.