Comparative advantage is always a(n) ________ concept.
A) absolute
B) efficiency
C) relative
D) monetary
Ques. 2Camels have been used as money. Which function of money would this type of money perform least well?
A) medium of exchange
B) unit of accounting
C) store of value
D) standard of deferred payment
Ques. 3The short-run effect of an increase in the money supply is to
A) increase real GDP only.
B) increase the price level only.
C) increase both real GDP and the price level.
D) increase nominal GDP but decrease the price level.
Ques. 4Which of the following statements is NOT consistent with new growth theorists' beliefs?
A) Innovation can lead to lower productivity costs.
B) Inventions are much more important than innovation.
C) Technology must be understood in terms of what drives it.
D) Rewards lead to technological advances.
Ques. 5The broadest indication of economy-wide inflation is captured by the
A) Consumer Price Index.
B) Gross Domestic Product (GDP) deflator.
C) Producer Price Index.
D) Personal Consumption Expenditure Index.
Ques. 6Which of the following is a political function of government but is not a central economic function?
A) determining who has a right to vote
B) determining government-sponsored and government-inhibited goods
C) providing a legal system to adjudicate property rights
D) redistributing income from some individuals to others
Ques. 7If high level of corruption in a country deters foreign investment in worthy projects, this is known as
A) portfolio investment.
B) moral hazard.
C) foreign direct investment.
D) adverse selection.
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