If a country wants to promote future growth, it should
A) produce more capital goods today.
B) produce more consumer goods today.
C) produce only economic goods.
D) produce only needed goods.
Answer: A
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A decrease in taxes will have no effect on real GDP if
A) the tax decrease is offset by an increase in government spending. B) people look at changes in taxes only in the present. C) the Ricardian equivalence theorem holds. D) there is no crowding out.
Which of the following statements is true?
A. Comparative advantage means that total world output will be greatest when each good is produced by the nation that has the highest domestic opportunity cost of producing it B. Comparative advantage means that a nation can gain from trade only if it has a lower labor productivity than its trading partner C. Specialization will be complete among nations when opportunity costs increase as the nations produce more of a particular product D. Specialization will be less than complete among nations when opportunity costs increase as the nations produce more of a particular product