Refer to the table above. Country A has a comparative advantage in
A) beer.
B) wine.
C) both beer and wine.
D) neither beer nor wine.
A
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The real wage rate is the ________ divided by the ________
A) equilibrium quantity of employment; potential GDP B) nominal wage rate; inflation rate C) nominal wage rate; price level D) quantity of labor demanded; quantity of labor supplied E) quantity of labor supplied; quantity of labor demanded
The costs of disinflation would be low if
A) expected inflation falls as inflation falls. B) wage and price controls were used. C) the Phillips curve were nearly horizontal. D) the Phillips curve adjusted slowly to changes in inflation.
Paying money in order to guarantee a certain level of compensation should an adverse event occur is
A. risk aversion. B. risk smoothing. C. risk pooling. D. risk rating.
Suppose that the Fed decides to increase the growth rate of the money supply in the United States. What is most likely to happen to the U.S. trade deficit and to GDP?
a. The trade deficit will fall; GDP will fall. b. The trade deficit will rise; GDP will rise. c. The trade deficit will fall; GDP will rise. d. The trade deficit will rise; GDP will fall.