The amount of good A given up for good B in trade is the
A. Exploitation of consumers.
B. Comparative advantage.
C. Terms of trade.
D. Absolute advantage.
Answer: C
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Which of the following will shift an economy's production possibilities curve outward?
A. An improvement in technology B. An increase in the unemployment rate C. A decrease in land, labor or capital D. A decrease in the unemployment rate
Use the following production possibilities frontiers to answer the next question.
Curve (a) is the initial frontier for the economy, and the nation is initially producing combination P. A shift from curve (a) to curve (b) suggests that the economy can then increase its production of capital goods
A. so as to produce the combination L. B. and consumer goods simultaneously, except at the point where the curve intersects the vertical axis. C. but will have to hold constant its production of consumer goods. D. only if it reduces its production of consumer goods.
In the past twenty years or so, all major U.S. trade legislation has typically included all of the following except
A) negotiating authority for the President to try to achieve new trade agreements. B) new U.S. trade barriers in the form of dumping or countervailing duty laws. C) new U.S. trade barriers in the form of uniformly higher tariffs on all goods. D) expanded laws calling on the President and USTR to investigate and challenge unfair trading practices of foreign countries.
Covered interest arbitrage ensures
A) exchange parity. B) purchasing power parity. C) interest parity. D) All of the above.