The concept of an open economy means that
A. a nation's borders are open to flows of imports and exports.
B. imports should be limited while exports should be expanded.
C. imports and exports should be restricted.
D. exports should be controlled but imports should be allowed in without restriction.
Answer: A
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In the long run, firms in a monopolistically competitive market
A) usually earn positive economic profits. B) always earn monopoly profits. C) usually earn economic losses. D) earn zero economic profits.
Inflation is an increase in the overall price level in the economy
a. True b. False Indicate whether the statement is true or false
The reserve ratio is 10 percent, banks do not hold excess reserves, and people hold only deposits and no currency. When the Fed sells $20 million worth of bonds to the public, bank reserves
a. increase by $20 million and the money supply eventually increases by $20 million. b. increase by $20 million and the money supply eventually increases by $200 million. c. decrease by $2 million and the money supply eventually increases by $20 million. d. decrease by $20 million and the money supply eventually decreases by $200 million.
Over the last twenty years in the U.S., the number of banks has:
A. steadily decreased. B. stayed about the same. C. more than doubled. D. steadily increased.