What are the gains from specialization and trade?
What will be an ideal response?
From society's standpoint, the total output of goods and services available for consumption is greater with specialization and trade. From an individual's perspective, each person who specializes enjoys being able to consume a larger bundle of goods and services after trading with others who have also specialized, than would otherwise be possible under self-sufficiency. These increases are the gains from specialization and trade for society and for individuals.
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An increase in the marginal propensity to consume (MPC) leads to a increase in the spending multiplier
a. True b. False Indicate whether the statement is true or false
An economic hypothesis: a. can be tested using empirical analysis
b. can be tested using normative analysis. c. cannot be tested since it is normative in nature. d. cannot be tested since it is a positive economic statement.