Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Hansen
A) is incorrect. Free trade raises living standards by increasing economic efficiency.
B) is advancing the anti-dumping argument for protectionism.
C) is correct in arguing that the high wages of U.S. workers make it impossible to compete with workers in low-wage countries.
D) is right in asserting the need to protect high wages if the United States wishes to maintain its high standard of living.
A
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If the world real interest rate were 6% and the domestic real interest rate in Estonia was 4%, borrowers in Estonia would borrow at the rate of ________ and lenders in Estonia would lend at the rate of ________
A) 6%; 6% B) 6%; 4% C) 4%; 6% D) 4%; 4%
A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:
Given the production possibilities schedule above, a combination of 3 tanks and 350 autos:
A. Illustrates the tradeoff between tanks and autos
B. Is attainable but entails some unemployment or inefficient use of society's resources
C. Cannot be produced by society, given its current resources and production technology
D. Is not attainable because this combination is not listed in the schedule