The law of comparative advantage explains why
a. individuals choose specialized careers.
b. firms specialize in the production of certain goods.
c. nations develop strengths in certain industries.
d. All of the above are correct.
d
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Modern paper money is fiat money because it is backed only by the faith the holder has in the government that issued it.
Answer the following statement true (T) or false (F)
A labor market is divided into two segments. All workers have the same qualifications and find jobs in either segment equally attractive. Initially, both segments are in competitive equilibrium. If the development of employer prejudice then reduces the employment of minorities in one segment, there will be a
a. permanent drop in labor supply to the discriminating segment b. permanent increase in labor supply to the nondiscriminating segment c. temporary drop in labor supply to the discriminating segment d. permanent drop in labor demand to the discriminating segment e. temporary drop in labor demand to the nondiscriminating segment
Figure 16-2
Assume that a contractionary monetary policy has shifted the aggregate demand curve in Figure 16-2 from D0D0 to D1D1. Fiscal authorities who wish to restore real GDP to the full-employment level will
a.
run a budget surplus by increasing taxes or cutting government spending.
b.
run a balanced budget to prevent the interest rate from rising and cutting off investment.
c.
run a budget deficit by cutting taxes or increasing government spending.
d.
ignore the change in monetary policy since it has no effect on fiscal policy.
the intersection of the aggregate demand and aggregate supply curve determine......(2)
What will be an ideal response?