Many economists believe that the collapse of world trade and the depression in the 1930s were linked by a decrease in real income caused by producing on the basis of comparative advantage

Suppose that business firms spend $500 million on new capital equipment this year. Of this $500 million, $300 million was spent on domestically produced capital and $200 million was spent on foreign-produced capital

All else equal, these transactions contribute ________ to GDP. A) $500 million B) $300 million C) $800 million D) $200 million E) $0

When the actual real GDP exceeds the natural real GDP as in Figure 1-2 above, we expect to find that unemployment is

A) high and inflation is high. B) low and inflation is high. C) low and inflation is low. D) high and inflation is low.