The reserve ratio represents the proportion of deposits that a bank wishes to hold with itself
a. True
b. False
Indicate whether the statement is true or false
True
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Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive, it would be reasonable to expect the United States to
A) specialize completely in soybean production. B) specialize completely in avocado production. C) increase soybean production, but still produce some avocados. D) increase avocado production, but still produce some soybeans.
What does a current account deficit do that is positive for a nation?
What will be an ideal response?
Which of the following is not a potential drawback to public provision of public goods?
a. Public provision lacks clear signals about the value of the good being produced, possibly leading to under and over provision of the goods. b. Many collective consumption goods might be overproduced private goods. c. Public provision often implies taxation, which creates an excess burden that might overwhelm any efficiency gains. d. Many collective consumption goods are really impure private goods and thus the efficient level of output is never reached.
If a 10 percent increase in price causes a 5 percent increase in quantity supplied, then supply is
A) elastic. B) inelastic. C) unit elastic. D) infinite.