Changes in the Products for Which a Nation Has a Comparative

question 167

True/False

Changes in the products for which a nation has a comparative advantage create sectoral shocks leading to an increase in frictional unemployment.

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Definitions:

Short-run Economy

The period in which the quantities of at least one input, such as capital, is fixed and firms adjust only labor inputs to change output levels.

Money Supply Growth Rate

The speed at which available monetary resources in an economy grow over a determined time frame.

Short-run Phillips Curve

A graphical representation indicating an inverse relationship between the rate of inflation and the rate of unemployment in the short term.

Inflation

The measure of how quickly the general price level for products and services grows, resulting in reduced consumer purchasing ability.