The law of comparative advantage indicates that
a. specialization and exchange will permit trading partners to maximize their joint output.
b. a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods.
c. a nation can gain from trade only when its trading partners are not low-wage countries.
d. countries should export products for which they are high-opportunity cost producers.
A
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When the rate of interest in the economy increases
A) real Gross Domestic Product (GDP) will increase. B) the market price of existing bonds will fall. C) the asset demand for money will increase. D) the transaction demand for money will increase.
Refer to Figure 3-4. If the price is $25
A) there is a shortage of 300 units. B) there is a shortage of 200 units. C) there is a surplus of 200 units. D) there is a surplus of 300 units.