If countries do not engage in international trade:
A) they give up the ability to specialize in production.
B) worldwide levels of production are lower.
C) the world will be operating inside its production possibilities curve.
D) all of the above are true.
Ans: D) all of the above are true.
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In the foreign exchange market, the demand for dollars decreases and the demand curve shifts leftward if the
A) U.S. interest rate differential increases. B) U.S. exchange rate falls. C) U.S. interest rate differential decreases. D) U.S. exchange rate rises. E) expected future exchange rate rises.
Refer to Figure 11-5. Curve G approaches curve F because
A) marginal cost is above average variable costs. B) fixed cost falls as capacity rises. C) average fixed cost falls as output rises. D) total cost falls as more and more is produced.
In the recession that started in 2008, the savings rate:
A. increased. B. decreased. C. stayed the same. D. became negative.
The aggregate demand curve will shift rightward when there is:
A. a decrease in government spending. B. a decrease in incomes abroad. C. a tax increase. D. the expectation that future consumer income will rise.