If Irene can make either four chairs or one table in an hour and Greg can make either three chairs or two tables in an hour then
A) Irene has the absolute advantage in the production of chairs.
B) Irene has the comparative advantage in the production of tables.
C) Greg has the absolute advantage in the production of chairs.
D) Greg has the comparative advantage in the production of chairs.
A
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In the above figure, the economy is at point A when changes occur. If the new equilibrium has a price level of 120 and real GDP of $15.0 trillion, then it must be the case that
A) aggregate demand has increased. B) aggregate demand has decreased. C) aggregate supply has decreased. D) aggregate supply has increased.
Equilibrium in the foreign exchange market occurs:
a. at the point where the foreign exchange demand and supply curves intersect. b. at the point where the foreign exchange demand and supply curves reach maximum separation. c. when two nations' economic leaders agree on the appropriate exchange rate. d. when two nations' diplomatic leaders agree on an exchange rate that meets both countries' needs. e. only by chance, if at all, because they change very frequently.
If a reduction in stock prices reduces the real wealth of Americans, the
a. aggregate demand curve will shift to the left. b. long-run aggregate supply will shift to the left. c. general price level will increase. d. aggregate demand curve will shift to the right.
Government spending:
A. tends to increase with decreases in the price level. B. tends to increase with increases in the price level. C. remains generally unaffected by changes in the price level. D. is not a component of aggregate demand.