In the specific factors model, a 5% increase in the price of food accompanied by a 0% increase in the price of cloth will cause wages to ________, the production of cloth to ________, and the production of food to ________
A) increase by less then 5%; decrease; increase
B) increase by 5%; remain unchanged; remain unchanged
C) increase by more then 5%; increase; remain unchanged
D) remain constant; increase; increase
E) remain constant; decrease; decrease
A
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When the exchange rate for a currency rises so that the currency trades for more of other currencies, it is said to be depreciating
a. True b. False Indicate whether the statement is true or false
Obstacles that restrict trade, either domestic or international, will
a. reduce output, income, and the general living standard of the populace. b. help people achieve higher income levels. c. help promote high rates of economic growth. d. encourage domestic business firms to expand output so they can achieve larger gains from the adoption of mass production techniques.