The LM curve represents combinations of income and interest rate which
A) clear the goods market.
B) achieve the external equilibrium.
C) clear the money market.
D) achieve internal equilibrium.
Question 2 - Which of the following theorems predicts that trade benefits the abundant factors of a country and harms the scarce factors?
A) The Stolper-Samuelson theorem.
B) The Rybczynski theorem.
C) The Heckscher-Ohlin theorem.
D) None of the above.
Question 3 - The Single European Act was expected to create economic benefits by reducing the costs and risks of currency market transactions.
Indicate whether the statement is true or false
Question 4 - The infant industry argument is that
A) comparative advantage is irrelevant to economic growth.
B) developing countries have a comparative advantage in agricultural goods.
C) developing countries have a comparative advantage in manufacturing.
D) developing countries have a potential comparative advantage in manufacturing.
E) developing countries have no chance to compete with industrialized countries.