Maximum Feasible Hourly Production Rates (in Tons) of EitherWine or Beef Using All Available ResourcesProductArgentinaFranceWine (gallons)3060Beef (pounds)1030Use the above table. Assuming constant opportunity costs, if Argentina and France specialize based on comparative advantage, then they will trade if the rate of exchange
A. is 2.5 gallons of wine for 1 pound of beef, and Argentina imports beef.
B. 0.2 pound of beef for 1 gallon of wine, and Argentina imports wine.
C. 4 gallons of wine for 1 pound of beef, and France imports beef.
D. 8 pounds of beef for 1 gallon of wine, and France imports wine.
Answer: A
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Suppose the government decided to tighten monetary policy and decrease government expenditures. In the short run in the Keynesian model, the effect of these policies would be to ________ the real interest rate and ________ the level of output
A) lower; decrease B) lower; have an ambiguous effect on C) have an ambiguous effect on; decrease D) raise; decrease
Firms in monopolistic competition would
A) persistently realize economic profits in both the short and long run. B) may realize economic profits in the long run and normal profits in the short run. C) tend to incur persistent losses in both the short and long run. D) tend to realize economic profits in the short run and normal profits in the long run.