The terms of trade
a. equal the ratio of opportunity costs of production in two countries
b. equal the ratio of marginal production costs in two countries
c. is the quantity of one good that is exchanged for one unit of another good
d. are determined by absolute advantage
e. equal the ratio of average production costs in two countries
C
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Refer to the scenario above. If both economies have the same depreciation rate, then which of the following statements will be true?
A) Economy A will have a greater capital stock and a lower GDP than economy B. B) Economy A will have a greater capital stock and GDP than economy B. C) Economy A will have a lower capital stock and GDP than economy B. D) Economy A will have a lower capital stock and a greater GDP than economy B.
A $50 billion increase in both government spending and taxes will
A) increase GDP by less than $50 billion. B) not change the level of GDP. C) increase GDP by $50 billion. D) increase GDP by more than $50 billion.
Short-run macroeconomic equilibrium occurs when the quantity of real GDP demanded ________
A) equals potential GDP B) equals full-employment GDP C) does not equal full-employment GDP D) equals the quantity of real GDP supplied
Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y, and 0X and 20Y. The opportunity cost of one unit of X for Carlos is
A) 1 unit of Y. B) 2 units of Y. C) 1/2 unit of Y. D) 1/4 unit of Y. E) none of the above