When output is held constant, inflation does which of the following?
(a) Increases real GDP
(b) Increases real income
(c) Increases government spending
(d) Reduces the purchasing power of individuals
living on fixed incomes.
(d)
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The Philippines and Vietnam have roughly the same size population. Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion. You should conclude
A) it is not possible to make a good comparison of the economic well being of a typical individual in the 2 countries without additional information. B) a typical person in Vietnam is 10 times as well off as the typical person in the Philippines. C) a typical person in Vietnam is more than 10 times as well off as the typical person in the Philippines. D) a typical person in Vietnam is less than 10 times as well off as the typical person in the Philippines.
Which of the following is true if a nation does not have an absolute advantage in producing any goods or service?
a) it cannot have a comparative advantage either b) it will have a comparative advantage in the production of the good or device in which it has a lower opportunity cost c) it will export raw materials and import finished products d) no country will want to trade with this nation because it is not cost effective to do so e) the international value of its currency will be fixed