Two important assumptions contained in David Hume's price specie-flow
Adjustment mechanism are that
A) countries are at full employment and the demands for traded goods are
"inelastic."
B) countries are at full employment and the price level of a country moves in
Inverse proportion to movements in the country's money supply.
C) a country with a balance-of-payments deficit will experience a gold outflow And countries are at a level of employment that is below full employment.
D) the demands for traded goods are "elastic" and countries are at full
Employment.
Correct Answer:
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Q1: During the price-specie-flow adjustment process to a
Q2: David Hume's price-specie-flow mechanism
A) reinforced the Mercantilist
Q4: If the demand for traded goods is
Q5: Explain what is meant by a zero-sum
Q6: Why was a positive trade balance so
Q7: (a) Why did the Mercantilists think
Q8: The price-specie-flow mechanism suggested that
A) a country
Q9: In Adam Smith's view, international trade
A) benefited
Q10: In David Hume's price-specie-flow doctrine or adjustment
Q11: Explain how the price-specie-flow mechanism operates to
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