Why do governments want to maintain the health of the banking system?
What will be an ideal response?
Banks reduce information costs in the financial system.
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All else held constant, an increase in foreign imports of cameras would cause the supply of cameras in the United States to:
A) increase. B) stay the same. C) decrease. D) cannot be determined with the information given.
Lois sells ten sweaters she had knitted to a retail store. The gross domestic product (GDP) of her country _____
a. will increase b. will decrease c. will remain unaffected d. will increase only if the sweaters are as good as the sweaters sold by other retailers e. will increase if the price of each sweater is less than the cost of inputs required
If your bank receives a checkable deposit of $20,000 cash, and the banking system makes loans totaling $60,000 . the maximum possible, then the money multiplier must be:
a. 2. b. 2.5. c. 3. d. 3.5. e. 4.
The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that
a. Wheatland has a comparative advantage, relative to other countries, in producing corn. b. other countries have a comparative advantage, relative to Wheatland, in producing fish. c. the price of fish in Wheatland exceeds the world price of fish. d. if Wheatland were to allow trade, it would import corn.