Trade can be beneficial to an economy because:
A) it results in a more efficient use of the combined resources of some of the trading countries, even though it reduces efficiency in others.
B) more goods and services can be obtained at lower opportunity cost.
C) it prevents specialization in those activities in which countries have a comparative advantage.
D) It prevents unemployment.
Ans: B) more goods and services can be obtained at lower opportunity cost.
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Assume that a country has a domestic demand curve defined as Qd = 100 - 2P and a domestic supply curve defined as Qs = -20 + 3P. What is the autarchy equilibrium price and quantity?
What will be an ideal response?
Complete "crowding-out" describes the situation in the economy when
A) fiscal policy is effective in changing output. B) the shift in the LM curve by monetary policy is "impotent." C) the shift in the IS curve by fiscal policy is "impotent." D) fiscal policy crowds out monetary policy.