A production possibilites frontier is a strait line when
a. the more resources the economy uses to produce one good, the fewer resources it has available to
produce the other good.
b. an economy is interdependent and engaged in trade instead of self-sufficient.
c. the rate of tradeoff between the two goods being produced is constant.
d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
c. the rate of tradeoff between the two goods being produced is constant.
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The response of quantity demanded to price changes is shown by:
A. Price elasticity of demand. B. The determinants of demand. C. Opportunity cost. D. Income elasticity of demand.
Use the above figure. When the price increases from $2 to $10, the absolute price elasticity of demand is
A. 1.50. B. 0.67. C. 1.00. D. 0.25.
Suppose the desired reserve ratio is 10 percent. If Urban Bank has total deposits of $1000 and total assets of $10,000, the amount of desired reserves is
A) $9,000. B) $900. C) $100. D) $1,000. E) $1,100.
Suppose the required reserve ratio is 10 percent, but banks choose to hold an additional 15 percent of demand deposits as excess reserves. Under these conditions, the demand deposit multiplier will be
a. 0 b. 4 c. 5 d. 6.67 e. 10