If a nation has the lowest opportunity cost of producing a good, that nation has a(n) ________ in the production of that good.
A. comparative advantage
B. comparative advantage and an absolute advantage
C. absolute advantage
D. absolute advantage and possibly a comparative advantage
Answer: A
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National income equals GNP
A) less depreciation, less net unilateral transfers, less indirect business taxes. B) less depreciation, plus net unilateral transfers, plus indirect business taxes. C) less depreciation, less net unilateral transfers, plus indirect business taxes. D) plus depreciation, plus net unilateral transfers, less indirect business taxes. E) less depreciation, plus net unilateral transfers, less indirect business taxes.
If the IS curve is relatively steep, then
A) there can be no long-run tradeoff between inflation and unemployment. B) monetary policy cannot be very effective in changing GDP. C) rational expectations theory is probably correct. D) Ricardian equivalence most likely holds. E) budget deficits will not affect future capital accumulation.
A person experiences a capital gain if she
A. settles a debt. B. invests in a physical capital project. C. sells an asset for more than what she paid for it. D. contributes to a country's production of capital goods.
The twin problems of the U.S. health care industry are:
A. rapidly rising costs and unequal access to health care. B. declining quality of health care and the duplication of specialized equipment at hospitals. C. declining per capita spending on health care and the moral hazard problem. D. the decline in the number of family physicians and the failure to vaccinate children.