If Bank A has excess reserves of $1 million and all other banks in the system do not have any excess reserves, then the amount of additional loans that can be made by the banking system will be:
A. $1 million also
B. A fraction of $1 million
C. A multiple of $1 million
D. $1 million times the required-reserve ratio
C. A multiple of $1 million
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Skill-biased technological change increases wage inequality by altering the ________ high-skilled workers relative to low-skilled workers.
A. reservation price of B. supply of C. demand for D. mobility of
Cab drivers operating from JFK Airport to the City of New York legally must charge a specific fare. This is an example of
A. social regulation. B. the rate of return test. C. economic regulation. D. the market share test.
As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases. B. initially decreases, then increases. C. decreases. D. initially increases, then decreases.
Suppose that by devoting all of its resources to the production of A, the nation of Econia can produce 50 A. By devoting all of its resources to the production of B, Econia can produce 25 B. The comparable figures for the nation of Optima are 5 A and 5 B. According to the principle of comparative advantage, which nation will specialize in which product? What are the limits to the terms of trade?
What will be an ideal response?