Question
If an unintended increase in business inventories occurs at some level of GDP, then GDP:
is too low for equilibrium
entails a rate of aggregate expenditures in excess of the rate of aggregate production
is too high for equilibrium
may be either above or below the equilibrium output
Question
The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that:
a nation’s production possibilities and trading possibilities lines coincide
the production possibilities curves of any two nations are identical
a nation’s trading possibilities line lies to the right of its production possibilities line
a nation’s production possibilities line lies to the right of its trading possibilities line
Question
In the theory of comparative advantage, a good should be produced in that nation where:
its cost is least in terms of alternative goods that might otherwise be produced
its absolute cost in terms of real resources used is least
its absolute money cost of production is least
the production possibilities line lies further to the right than the trading possibilities line