If there is no comparative advantage in the production of either of the two goods produced by countries 1 and 2, then
A) the benefits resulting from trade between the two countries are increased.
B) there are no gains from specialization and trade between the two countries.
C) one country must be more productive in producing all goods than the other.
D) each country should specialize in the production of a particular good.
E) none of the above
B
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In the aggregate expenditures model, if aggregate expenditures (AE) are less than GDP, then:
a. inventory is depleted. b. inventory is unchanged. c. employment decreases. d. employment increases.
If decreased government borrowing drives down real interest rates in the United States,
a. private investment will tend to decline. b. the dollar will depreciate leading to an increase in net exports. c. an inflow of capital will cause the dollar to depreciate. d. All of the above are true.