Why does the return to capital change after trade occurs?
a. There is more labor used per unit of capital in the manufacturing sector.
b. There is more capital used per unit of labor in the manufacturing sector.
c. There is more labor used per unit of land in the agricultural sector.
d. There is more land used per unit of labor in the agricultural sector.
Answer: a. There is more labor used per unit of capital in the manufacturing sector.
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A change that increases the real money supply relative to real money demand causes
A) the LM curve to shift down and to the right. B) the LM curve to shift up and to the left. C) the IS curve to shift down and to the left. D) the IS curve to shift up and to the right.
An external benefit is a benefit from an activity that falls on a third party who is not a party to the activity
a. True b. False