As with New Technology,trade Can Be Viewed as a Way

question 64

Multiple Choice

As with new technology,trade can be viewed as a way for:

• A)an economy to increase its production possibilities and welfare.
• B)an economy to specialize to the detriment of everyone.
• C)exporters to benefit at the expense of everyone else.
• D)an economy to reduce its aggregate production.
• E)none of the above

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Definitions:

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Central Bank

An institution that manages a country's currency, money supply, and interest rates. Central banks also oversee the commercial banking system of their respective countries.

Sacrifice Ratio

The sacrifice ratio measures the cost of reducing inflation in terms of the percentage of GDP lost per each percentage point decrease in inflation.

Volcker Disinflation

A period during the early 1980s when the Federal Reserve, led by Chairman Paul Volcker, raised interest rates to historically high levels in order to combat high inflation.