The basic proposition in international trade is that
A) trade is determined by absolute advantage.
B) in the long run, imports are paid for by exports.
C) everyone is made better off by free trade.
D) fair trade is more important than free trade.
Answer: B
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A lower real interest rate, amount of consumer debt, and personal taxes ________ personal consumption expenditures
A) increase B) decrease C) have no effect on D) none of the above
If Indiana has an absolute advantage over Maine in producing both corn and ball bearings, then
a. Indiana should produce both corn and ball bearings b. there are no benefits possible from specialization c. Maine should produce ball bearings and Indiana should produce corn d. Indiana should produce ball bearings and Maine should produce corn e. they still may benefit from specialization, but more information is needed to determine which state should specialize in each