Tophatexam questions - Study guides, Class notes & Summaries

If output decreases, then the interest rate ---- and the exchange rate ----. - Answer falls, depreciates In the short run, a temporary decrease in government spending would shift the ---- curve to the ----. In addition, the current account balance would ----. - Answer DD; left; rise In the short run, if the government engages in contractionary monetary policy, - Answer GDP falls, the interest rate rises, and the exchange rate appreciates.

In the U.S labor can produce 5 bottles of wine per hour or 20 years of cloth per hour. In the U.K, labor can produce 10 bottles of wine per hour or 30 yards of cloth per hour. For wine, the --- has the absolute advantage and the --- has the comparative advantage - Answer U.K; U.K Suppose a country has two industries, agriculture and manufacturing. When the country opens to trade, the relative price of the agricultural good falls. Who is definitely hurt by trade? - Answer Factors specific to...