In equilibrium, all traded goods sell at the same price internationally because of
a) government intervention
B) arbitrage
C) the fact that the underlying value is the same everywhere
D) none of the above
Ans: B) arbitrage
Economics
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If Wendy can produce more of all goods than Tommy in an hour, then
A) Wendy has an absolute advantage in all goods. B) Wendy does not need to trade with Tommy in order to achieve the gains from trade. C) Wendy has a comparative advantage in all goods. D) Tommy has an absolute advantage in all goods. E) Only Tommy but not Wendy can benefit from trade between the two of them.
Economics
When money is accepted as payment in a market transaction, it is functioning as a
A) store of value. B) unit of accounting. C) medium of exchange. D) unit of investment.
Economics