The Ricardian proposition that international trade will benefit any country ("gains from trade") as long as the world terms of trade do not equal its autarkic relative prices is a straightforward and powerful concept
Nevertheless, it is impossible to demonstrate empirically. Why?
This is because there is no way of knowing exactly what are, or would have been, the autarky MRTs or MRSs. This is because there is no single example in the world of a country that is totally unengaged in international trade.
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If the price of apples is on the vertical axis and the quantity of apples demanded is on the horizontal axis, the slope between two points on the line describing the relationship between price and quantity is
A) the change in price multiplied by the change in quantity. B) the change in price divided by the change in quantity. C) the change in quantity divided by the change in price. D) price divided by quantity.
Central bank credibility may be established by ________
A) the appointment of individuals to the Fed with a strong aversion to inflation B) quicker responses to negative aggregate supply shocks C) greater coordination between monetary and fiscal policy D) the appointment of central bankers who are hawkish on defense