A fundamental principle of international trade is that
A. a country could never have lower resource costs than other countries in the production of ALL goods and services.
B. a country could never have lower opportunity costs than other countries in the production of ALL goods and services.
C. two nations could both have a comparative advantage over each other in production of the same good.
D. the world gains from trade because trade allows production of goods and services to move to nations with the lowest resource cost.
B. a country could never have lower opportunity costs than other countries in the production of ALL goods and services.
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Assume that the currency—deposit ratio is 0.5. The Federal Reserve carries out open-market operations, purchasing $1 million worth of bonds from banks. This action increased the money supply by $2 million. What is the reserve—deposit ratio?
A) 0.25 B) 0.35 C) 0.40 D) 0.50
The marginal product of labor is calculated assuming other factor inputs
A) increase more than proportionately. B) increase less than proportionately. C) remain constant. D) decrease.
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
a. Even more intraregional trade of goods across the three countries. b. Lower transaction costs of trading within North America. c. A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso. d. Less migration of workers across the three countries. e. An elimination of correlated macroeconomic shocks across the countries.