The index that measures the change in price of a typical basket of consumer goods is
a. the GDP deflator.
b. the consumer price index.
c. nominal GDP.
d. real GDP.
B
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The motive for the erecting trade barriers to import goods and services from abroad is to
A. improve economic efficiency in that nation. B. protect and benefit special interest groups in that nation. C. reduce the prices of the goods and services produced in that nation. D. expand the export of goods and services to foreign nations.
If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. Which of the following statements is correct?
A. Leo has both the absolute advantage and the comparative advantage in fudge. B. Ana has the comparative advantage in toffee, but Leo has the absolute advantage in toffee. C. Ana has the comparative advantage in fudge, but Leo has the absolute advantage in fudge. D. Ana has both an absolute advantage and the comparative advantage in fudge.