If Daniel Produces One Pair of Shoes in 4 Hours

question 178

Multiple Choice

If Daniel produces one pair of shoes in 4 hours and Sarah produces one pair of shoes in 3 hours, then

• A)Sarah has a comparative advantage in shoemaking
• B)Daniel has a comparative advantage in shoemaking
• C)Sarah has an absolute and a comparative advantage in shoemaking
• D)Daniel has an absolute and a comparative advantage in shoemaking
• E)Sarah has an absolute advantage in shoemaking

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Definitions:

Money Supply

The total sum of all financial assets in an economy at any given moment, which includes cash, coins, and the balances in checking and savings accounts.

Deposits

Funds placed into an account at a banking institution for safekeeping.

Money Market Mutual Funds

Investment funds that pool money from investors to purchase low-risk, short-term securities like Treasury bills and commercial paper.

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits and money market securities.