A.   more variety of goods and services

B.   specialization

C.   higher prices

D.   greater competition

A.   the economy will fluctuate around its potential GDP

B.   the government should focus on reducing cyclical unemployment

C.   the government should focus on reducing the natural rate of unemployment

D.   the government should focus on long term growth

A.   a decrease in interest rates

B.   a decrease in net exports

C.   an increase in government spending

D.   a decrease in taxes

A.   Indonesia has an absolute advantage in producing both fish and copper

B.   Malaysia has an absolute advantage in producing both fish and copper

C.   Indonesia has the comparative advantage in producing copper

D.   Malaysia has the comparative advantage in producing fish

A.   an initial decrease in spending, cycles repeatedly through the economy and has a larger impact than the initial dollar amount spent

B.   an initial increase in spending, cycles repeatedly through the economy and has a smaller impact than the initial dollar amount spent

C.   an initial increase in spending, cycles repeatedly through the economy and has a larger impact than the initial dollar amount spent

D.   an initial increase in spending,  has no impact on the economy

A.   the government can make the economy recover faster

B.   fiscal policy is effective in fighting recessions

C.   the economy will adjust on its own

D.   the government works efficiently

A.   produce a good or service at a lower opportunity cost

B.   produce a good or service using fewer resources than another country

C.   produce a good or service at a higher opportunity cost

D.   produce a good or service using more resources than another country

A.   the economy is at full employment

B.   the economy is past full employment

C.   wages and prices are flexible

D.   wages and prices are sticky

A.   competition is beneficial

B.   low income countries have high environmental standards

C.   trade creates more jobs

D.   they want nurture infant industries and protect them from foreign competition

A.   1 box of cheese = 2 bottles of wine

B.   1 box of cheese = 4 bottles of wine

C.   1 box of cheese = 5 bottles of wine

D.   1 box of cheese = 10 bottles of wine

A.   inflation is too high

B.   wages and prices are flexible

C.   the government is slow to detect a recession

D.   wages cannot adjust when the economy slows

A.   people are well off and do not need assistance

B.   wages and prices adjust quickly

C.   wages and prices are sticky

D.   the government can make the economy recover faster

A.   to have a greater variety of goods and service

B.   to pay less for goods and services

C.   to protect domestic jobs

D.   to decrease domestic jobs

A.   the same

B.   high

C.   low

D.   rising

A.   Italy has the absolute advantage in producing wine

B.   France has the absolute advantage in producing cheese

C.   Italy has the comparative advantage in producing wine

D.   Italy has the comparative advantage in producing cheese

A.   a tariff reduces tax revenue

B.   a tariff lowers the world price of a good

C.   a tariff raises the world price of a good

D.   a tariff increases the amount of imports