Related to the Economics in Practice on P

question 134

Multiple Choice

Related to the Economics in Practice on p. 645: Surveys by the bank of England suggest that consumers tend to expect future inflation to be

• A) what they perceive past inflation to have been.
• B) equal to the actual estimates of past inflation made by the government.
• C) directly related to the interest rate.
• D) relatively unpredictable.

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Definitions:

Comparative Advantage

The capacity of a person or a collective to perform a specific economic function more effectively than another function.

Specialization

The practice of focusing resources on the production of particular goods or services for which a person or entity has a competitive advantage.

Comparative Advantage

The ability of an individual or country to produce a particular good at a lower opportunity cost than another.

Absolute Advantage

The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.