Unformatted text preview: e equilibrium level. C) actual output must be greater than the equilibrium level. D) inventories will likely begin to rise, causing firms to reduce production. E) both A and B are correct. 22) There will be no gains from specialization and trade between two countries if A) neither country has an absolute advantage in the production of any good. B) neither country has a comparative advantage in the production of any good. C) opportunity costs are the same in the two countries. D) there are no economies of scale. E) both B and C are correct. 5 23) In the simple macro model, desired investment is assumed to be autonomous with respect to national income. Which of the following will cause a shift of the investment function? A) a decrease in interest rates B) an increase in firms optimism about the economy C) an expectation of a downturn in economic performance D) all of the above E) none of the above 24) Because of scarcity, individuals are compelled to A) make choices among alternatives. B) sacrifice in consumption but not in...
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This test prep was uploaded on 03/13/2014 for the course ECON 101 taught by Professor Vanderwaal during the Fall '08 term at Waterloo.
- Fall '08