It may be unrealistic to assume that consumer tastes are the same across nations and invariant with respect to income:
A. so it is not one of the HO assumptions.
B. but it is an HO assumption because it enables the analysis to focus on other issues that drive trade and prices.
C. but it actually is true so it is an HO assumption.
D. and it is not an HO assumption because consumer tastes within a nation are not relevant to international trade.
Ans: B. but it is an HO assumption because it enables the analysis to focus on other issues that drive trade and prices.
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The evolution of the payments system from barter to precious metals, then to fiat money, then to checks can best be understood as a consequence of
A) government regulations designed to improve the efficiency of the payments system. B) government regulations designed to promote the safety of the payments system. C) innovations that reduced the costs of exchanging goods and services. D) competition among firms to make it easier for customers to purchase their products.