The StolperSamuelson theorem suggests that, over time, free international trade should lead to:
a. equalization of real wages across the world.
b. greater divergences in real wages across the world.
c. equalization of prices across the world.
d. greater divergences in prices across the world.
Ans: a. equalization of real wages across the world.
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A famous opera star made $2 million per year. He said he would rather sell insurance if he couldn't make more than $100,000 per year. If he is telling the truth, what's his opportunity cost as an opera star?
A) $2.0 million B) $100,000 C) $1.9 million D) $2.1 million
The actual money multiplier is smaller than the simple money multiplier because: a. the actual multiplier affects M2 rather than M1
b. cash withdrawals reduce the amount banks can lend out. c. the actual multiplier affects the amount of excess reserves each bank holds. d. the size of the simple multiplier depends on the volume of deposits unlike the actual multiplier. e. the actual multiplier uses a different measure of reserve requirements.