Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?
a. Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks.
b. Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.
c. Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats.
d. Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.
d
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"Sharp contractions in a country's output and employment invariably result from a crisis in which the country suddenly loses access to all foreign sources of funds." Explain how the current account identity necessitates these contractions
What will be an ideal response?
The LM curve slopes upward because
a. as income rises, savings rise, increasing output. b. as interest rates rise, the money supply rises, increasing output. c. as interest rates rise, planned investment must fall, increasing output. d. as income increases, money demand rises, which increases interest rates. e. none of the above.