In the long run, inflation results from increases in a nation's money supply that exceed increases in its output of goods and services

Efficiency wage theories claim that firms may pay high real wages in order to:

A. avoid the threat of unionization. B. make workers more productive. C. discourage unskilled workers from applying. D. reduce the level of frictional unemployment.

Explain how a mutually beneficial trade is possible in a two-country, two-commodity model even when one of the countries has absolute advantage in the production of both the commodities.

What will be an ideal response?