Two countries with differing comparative advantages may engage in trade because
A. They will be able to consume more goods in total due to specialization and trade.
B. They are required to because they are part of the World Trade Organization.
C. They will achieve an absolute advantage with one another.
D. They will be able to produce and consume goods on their production possibilities curves.
Answer: A
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Value added taxes _____
a. have the same tax base as a consumption tax b. have the same tax base as an estate tax c. have the same tax base as a retail sales tax d. have the same tax bas as an income tax
If aggregate demand and nominal GDP increase while the price level is constant, we would conclude that
A) the economy is already at full employment. B) the aggregate supply curve is upward sloping. C) the aggregate supply curve is horizontal. D) the aggregate demand curve is vertical.