Refer to the information provided in Table 33.1 below to answer the question(s) that follow. Table 33.1
Refer to Table 33.1. Before specialization, Mexico produces 120 bushels of oranges and 80 bushels of bananas, and Guatemala produces 40 bushels of oranges and 20 bushels of bananas. After specialization, the increase in orange production is
A. 10 bushels of oranges.
B. 20 bushels of oranges.
C. 25 bushels of oranges.
D. 40 bushels of oranges.
Answer: D
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Some would cite the purchase of defective products and the rising cost of health care as market failures. Argue that these are not true market failures.
What will be an ideal response?
The federal government budget has generally been in a deficit for the past several decades because
A) budget deficits promote full employment. B) every year during those decades was a recession year in which expansionary fiscal policy was called for. C) military expenditures were increased steadily throughout those decades. D) political pressure on Congress to increase taxes and to balance the budget were less effective than political pressure to increase expenditures.
One problem with using discount rate changes to influence deposit creation or destruction is that
a. small changes in the rate do not have much impact b. the discount rate changes are covert c. banks like to borrow from the Fed, and they will borrow even more after the changes d. the Fed must change the discount rate each time they meet e. banks do not have enough control over their demand deposits
If income increases and prices are unchanged, the consumer's budget constraint
a. remains the same. b. shifts outward. c. shifts inward. d. rotates outward along the horizontal axis.