If countries 1 and 2 produce only two goods, A and B, and they have the same opportunity cost for the production of good A (and thus good B), then
A) each country will specialize in the production of one good and engage in trade.
B) neither country will specialize in the production of a good, but both will engage in trade.
C) one country will specialize in the production of a good, and both will engage in trade.
D) neither country will specialize in the production of a good, and there will be no incentive for trade.
D
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The proportion of total direct expenditure made by local governments is called the centralization ratio.
A. True B. False C. Uncertain
What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?
a. At that point, interest rate policy cannot be used. b. Monetary easing can still occur whenever interest rates are greater than zero at the retail level. c. The central bank can increase the money supply, and interest rates can be less than zero. d. Borrowing can be stimulated in ways other than lower rates of interest.
Full-employment output is also called:
A. zero-unemployment output. B. equilibrium output. C. potential output. D. zero-savings output.
A firm that generates zero economic profit usually has
A) negative business profit. B) zero business profit. C) positive business profit. D) business profit equal to half the total revenue.