Author Question: Why is it likely that the United States has an absolute advantage in goods and yet it still ends up ... (Read 68 times)

rmenurse · **on:** Jun 29, 2018

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

What will be an ideal response?

Question 2

Moving along the short-run Phillips curve, if ________ increases, then ________ decreases.

A) unemployment; the price level
B) inflation; real GDP
C) inflation; unemployment
D) unemployment; the expected inflation rate
E) inflation; the price level

ladyjames123 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The United States might have an absolute advantage in producing a good but not a comparative advantage. In this case, the opportunity cost of producing the good in the United States is higher than in another country. Thus the United States will import the product from the other country.

Answer to Question 2

C