As more people in a developing country started using debit cards, banks installed more ATM machines, thereby benefitting all customers. This is an example of a(n) ________

Expenditure switching refers to

A) a switching back and forth between investment and consumption expenditures. B) a switching back and forth between domestic and foreign goods in response to changes in the exchange rate. C) a switching back and forth between domestic and foreign goods in response to changes in the interest rate. D) a switching of back and forth in the current account from a deficit to a surplus and vice versa. E) All of the above.

Which of the following is TRUE?

A) Adam Smith proposed the theory of comparative advantage as the basis for trade in The Wealth of Nations. B) David Ricardo proposed the theory of absolute advantage as the basis for trade. C) Absolute advantage is based on comparing the opportunity costs of trading partners. D) The Ricardian model assumes labor is perfectly mobile.