Trade between two parties is beneficial because:
a. it ensures that the standard of living in the poorer country matches its trading partner eventually.
b. it enables each to consume a bundle of goods that it cannot produced domestically.
c. it has an immediate effect on an economy by increasing its production set.
d. it allows the economy of both trading partners to grow equally.
B
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The slope of the consumption function
A. equals 1. B. is horizontal. C. equals the MPC. D. is vertical.
Fred and Ann both decide to see the same movie when they are given free movie tickets. We know that
A) both bear an opportunity cost since they could have done other things instead of see the movie. B) both bear the same opportunity cost since they are doing the same thing. C) the cost of going to the movie is greater for the one who had more choices to do other things. D) neither bears an opportunity cost because the tickets were free.
There is some agreement between the beliefs of President George W. Bush in 2001 on the effectiveness of tax cuts with the beliefs of former President
a. Keynes. b. Clinton. c. Reagan. d. Carter.
If the price elasticity of demand for a good is 1.4, then a 14 percent increase in the quantity demanded must be the result of
a. a 0.1 percent decrease in the price. b. a 1 percent decrease in the price. c. a 10 percent decrease in the price. d. a 19.6 percent decrease in the price.