The concept of comparative advantage leads to the conclusion that:
A) beneficial trade takes place if one country can produce everything more efficiently than another country.
B) trade will benefit the two countries if the relative costs of production differ in the two countries.
C) benefits from trade are possible only if all tariffs are eliminated.
D) everyone benefits from increased trade both in the short run and the long run.
Ans: B) trade will benefit the two countries if the relative costs of production differ in the two countries.
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The nominal interest rate approximately equals which of the following?
A) the real interest rate minus the inflation rate B) the real interest rate plus the inflation rate C) the real interest rate minus the growth rate of real GDP D) the real interest rate plus the growth rate of real GDP
Which of the following pairs of goods is likely to have a negative cross-price elasticity of demand?
A) pancakes and syrup B) orange juice and grapefruit juice C) peanuts and cat food D) hot dogs and hamburgers