The United States is one of the richest nations in the world,
A) so it does not need to trade with poor nations in order to achieve any gains from trade.
B) so it might not have a comparative advantage in producing any goods.
C) but it can still benefit from specialization and trade.
D) so it must have a comparative advantage in the production of all goods.
E) so it must have an absolute advantage in the production of all goods.
C
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The introduction of seat belts increased the number of accidents, even though the number of fatalities decreased. This is most likely a result of
a. Moral hazard b. Adverse selection c. seat belts distracting drivers d. None of the above
With the economy booming, the government starts to worry about the increasing rate of inflation, and decides to cut its spending on highway maintenance and defer it to sometime in the future. This is an example of:
A. an automatic stabilizer. B. discretionary fiscal policy. C. expansionary fiscal policy. D. None of these is true.