Evaluate the following statement. "The nation of Berundi has an absolute disadvantage in the production of everything compared to the United States. Therefore, the United States will have no reason to trade with Berundi"
What will be an ideal response?
This statement is false. The reason is that nations don't trade according to their absolute advantage but rather their comparative advantage. Even though the nation of Berdundi has an absolute disadvantage in the production of everything it is very unlikely that it won't have a comparative advantage in the production of at least one good or service vis-à-vis the United States.
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Holding money as a medium of exchange to make payments is
A) the capital demand for money. B) the transactions demand for money. C) the precautionary demand for money. D) the asset demand for money.
A decrease in the price level in an economy implies that _____
a. the spending multiplier will be equal to the marginal propensity to consume b. there will be an increase in investment c. there will be a decrease in investment d. the value of the spending multiplier will be equal to one e. the value of the spending multiplier will be equal to zero
If price is above the equilibrium price, then there will be:
A. excess supply. B. neither excess supply nor excess demand. C. excess demand. D. both excess supply and excess demand.
The time is March 2018. The United Kingdom (UK) committed to leave the European Union (EU) in March 2019. What are the issues the UK and the EU had to resolve for Brexit to be relatively smooth and orderly?
What will be an ideal response?