Suppose a Middle Eastern firm moves its final assembly line to Germany and then ships the final products to other members of the EU trading bloc. This is an example of
A) trade diversion.
B) trade deflection.
C) trade restriction.
D) trade detection.
B
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
A bank has deposits of $100,000, reserves of $20,000, and loans of $80,000. If the desired reserve ratio is 10 percent, then its excess reserves are
A) 0. B) $8,000. C) $10,000. D) $2,000. E) $12,000.
A waiter in an all-night restaurant at a dangerous location is likely to receive
A. a competitive market wage. B. a wage that equals returns to specific human capital. C. a wage that equals returns to general training. D. a wage with a compensating wage differential.
If both Ben and Catherine value good X more than good Y, a firm can increase profits by bundling the two products
Indicate whether the statement is true or false