Given that Sandy can produce 10 economics reports or make 2 sales calls and Tim can produce 2 economics reports or make 1 sales call, we can conclude that
A) Sandy should specialize in economics reports, and Tim should specialize in sales calls.
B) Sandy should produce both economics reports and sales calls since she cannot possibly gain from trade with Tim.
C) Tim should specialize in producing economics reports, and Sandy should specialize in producing sales calls.
D) Tim should produce both economics reports and sales calls.
A
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Firms in a small economy planned that inventories would grow over the past year by $300,000. Over that year, inventories actually grew by $400,000. This implies that
A) aggregate expenditure that year was less than GDP that year. B) aggregate expenditure that year was equal to GDP that year. C) there was a planned decrease in inventories that year. D) there was an unplanned decrease in inventories that year.
Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund
A. not make loans to risky nations because there is a high demand for funds from safer nations. B. impose tougher preconditions on borrowers. C. make loans to the riskiest nations so that private investors will not be tempted to take a risk. D. loan only to countries that have free elections.