Use the Following to Answer Question

question 198

Multiple Choice

Use the following to answer question:

-(Table: Wheat and Aluminum) Use Table: Wheat and Aluminum.The United States and Germany can produce both wheat and aluminum.The table shows the maximum annual output combinations of wheat and aluminum that can be produced.Based on the table:

• A)the United States has a comparative advantage in wheat and an absolute advantage in wheat.
• B)Germany has an absolute advantage in aluminum and a comparative advantage in wheat.
• C)the United States has a comparative advantage in both aluminum and wheat.
• D)Germany has a comparative advantage in aluminum and an absolute advantage in aluminum.

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Definitions:

Cyclical Unemployment

Refers to the unemployment that occurs due to fluctuations in the economy or the business cycle, such as during a recession.

Budget Deficit

A budget deficit occurs when a government’s expenditures exceed its revenues within a given fiscal period, leading to the need for borrowing or using saved reserves.

Keynesian Model

An economic theory advocating for government intervention in the economy through fiscal policies to manage demand and address unemployment.

Creeping Inflation

A relatively low rate of inflation, such as the rate of less than 4 percent in the United States in recent years.