Refer to the table above. If countries were to trade along the lines of absolute advantage
A) A would export X to B.
B) B would import Y from A.
C) neither country would want to trade.
D) More information is needed to determine the pattern.
A
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If the economy is operating at full employment when its aggregate demand curve is AD2, then a further increase in consumption and investment spending will cause:
Refer to the figure above.
A. Cost-push inflation, and the new equilibrium output will be less than Q2
B. Demand-pull inflation, and the new equilibrium output will be less than Q2
C. Demand-pull inflation, and the new equilibrium output will be more than Q2
D. Cost-push inflation, and the new equilibrium output will be more than Q2
Financial Crisis Suppose that banks are less able to raise funds and so lend less. Consequently, because people and households are less able to borrow, they spend less at any given price level than they would otherwise. The crisis is persistent so lending should remain depressed for some time. Refer to Financial Crisis. What happens to the price level and real GDP in the short run?
a. both the price level and real GDP rise b. the price level rises and real GDP falls c. the price level falls and real GDP rises d. both the price level and real GDP fall