Which set of changes is definitely predicted to lower Real GDP in the short run?
A) The money supply rises and labor productivity rises.
B) The U.S. dollar depreciates and wage rates fall.
C) The U.S. dollar appreciates and labor productivity rises.
D) Foreign real national income falls and wage rates rise.
E) none of the above
D
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The law of comparative advantages explains why
a. advanced nations will not trade with less-developed countries. b. an advanced nation will not trade with other countries. c. less-developed countries only trade among themselves. d. nations trade with each other, regardless of their relative levels of economic development. e. nations erect trade barriers.
In a competitive market economy, a resource in short supply will be allocated
a. so that each firm gets enough to keep producing some portion of its output. b. according to how much each firm purchased before the shortage. c. to those firms that can make the most profitable use of it. d. by government fiat.