Empirical tests of the theory of comparative advantage have provided
A) strong support for both the Ricardian and Heckscher-Ohlin models.
B) mixed support for the Ricardian model and strong support for the Heckscher-Ohlin model.
C) strong support for the Ricardian model and mixed support for the Heckscher-Ohlin model.
D) mixed support for both Ricardian and Heckscher-Ohlin models.
E) no support for either the Ricardian or the Heckscher-Ohlin models.
C
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Assume someone organizes all farms in the nation into a single-price monopoly. What is the monopoly's marginal revenue curve?
A) It is a horizontal line at the competitive industry's price. B) It is a line that lies below the new monopoly's demand curve. C) It is a vertical line at the monopoly's chosen output level. D) It is identical to the demand curve for the monopolist's output. E) It is a line that lies above the new monopoly's demand curve.
For each of the following changes, what happens to the real interest rate and output in the long run, after the price level has adjusted to restore general equilibrium? How would the results differ, if at all, between the classical and Keynesian
model? Draw a diagram for each part to illustrate your result. (a) Wealth rises. (b) Money supply rises. (c) The future marginal productivity of capital increases. (d) Expected inflation declines. (e) Future income declines.
The market that coordinates the exchange of productive inputs between the household and business sectors is the
a. stock market. b. goods and services market. c. resource market. d. loanable funds market.
Keynesian economist believe that there is a _____ relationship between savings and interest rates and a _______ relationship between investment and interest rates.
A. direct; direct B. direct; inverse C. inverse; inverse D. inverse; direct