Opportunities created by trade:
A) induce a greater degree of specialization.
B) are evidenced by higher opportunity costs of production.
C) are a result of absolute advantage.
D) are few and far between.
Answer: A) induce a greater degree of specialization.
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If banks borrowed from the Fed when the federal funds rate was below its target level
A) the supply of reserves would decrease and the federal funds rate could fall even further. B) the supply of reserves would increase and the federal funds rate would rise. C) the supply of reserves would decrease and the federal funds rate would rise. D) the supply of reserves would increase and the federal funds rate could fall even further.
Monetary theorists maintain that to eliminate the business cycle, it is necessary to eliminate
a. money. b. currency. c. bank creation of check able deposits. d. bank reserves.
If Brazil experienced a period of rapid and unexpected inflation, causing Brazilians to lose confidence in the local currency (real) as a store of value, which of the following would be least likely to occur?
a. The value of the Brazilian real would depreciate on the foreign exchange market. b. Foreign currency would be used as a substitute for the real. c. The real would be used as a store of value in other countries d. Brazilians would save less. e. The purchasing power of the real would decrease.
In the 1700s and 1800s:
A. the invisible hand was free to push wage rates down to subsistence levels. B. labor laws were passed to prevent child labor. C. labor laws were passed to protect workers from job-related injuries. D. the invisible hand was prevented from pushing wage rates down to subsistence levels.