The nation that has the absolute advantage in peanuts is India.
<h3>How to solve for the absolute advantage of these countries</h3>
a. The country that has the absolute advantage in the pounds of peanuts is India. They are able to produce 10 million worth of the product.
b. This is in the attachment
c. From the calculated opportunity costs, India has been shown to have the comparative advantage in peanuts so they have to specialize here.
The US on the other hand has to specialize in pecans because they have the comparative advantage in it.
d) The PPC for each country is a diagram
e. ) The terms of trade would be a pound of peanut for a pound of pec an for the countries.
Based on this the US would produce 10 units for pecans. They would use 5 units and exchange the remaining 5 units of pecans for 5 units of peanuts from India.
India is also going to do likewise.
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The formula to determine the multiplier(M) is:
M = 1 / (1 – MPC)
where:
MPC=Marginal propensity to consume
What Is a Multiplier?
A multiplier is a broad term in economics that refers to an economic factor that, when increased or changed, causes increases or changes in many other related economic variables. In terms of GDP, the multiplier effect causes total output gains to be greater than the change in spending that caused it.
Typically, the term multiplier refers to the relationship between government spending and total national income. The deposit multiplier is another multiplier used to explain fractional reserve banking.
Often the multiplier formula is considered to be too simple because it ignores some real-world complications. The Reason is:
Option A. The formula ignores the impact of an increase in GDP on consumption.
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Answer:
A) Contrast generational and life-cycle effects on political socialization.
Explanation: