Answer the following questions true (T) or false (F)
1. Once a country has a comparative advantage in producing a product, it cannot lose that advantage.
2. One reason a country does not specialize completely in production is that production of most goods involves increasing opportunity costs.
3. One of the main sources of comparative advantage is natural resources.
1. FALSE
2. TRUE
3. TRUE
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In the above figure, point C represents
A) a recessionary gap. B) a full-employment equilibrium. C) an inflationary gap. D) a decrease in aggregate demand.
As a general rule, you would be unwise to keep a deposit at an FDIC-insured bank in an amount greater than
A. 20 percent of the bank’s reserves. B. $1,000,000. C. $250,000. D. an infinite amount; there is no limit.
For a country with a fixed exchange rate, a monetary shock will have a smaller impact on the domestic economy than will a comparable domestic spending shock.
Answer the following statement true (T) or false (F)
Normative economics
A) is never studied at the undergraduate level. B) involves value judgments. C) is always objective. D) cannot be applied to all economic problems.