In general, a bank that held excess reserves would earn lower profits as a result
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The workers in Country B will benefit from trade if they:
A. specialize in bananas because they have a comparative advantage in banana production. B. specialize in tomatoes because their opportunity cost of tomatoes is higher than Country A's. C. specialize in tomatoes because their opportunity cost of tomatoes is lower than Country A's. D. specialize in bananas because they have an absolute advantage in banana production.
A testable proposition that predicts how people will react to changed circumstances is called a hypothesis
a. True b. False Indicate whether the statement is true or false
Under a system of flexible exchange rates, transactions that increase the supply of the nation's currency to the foreign exchange market will cause the nation's
a. currency to depreciate in value. b. currency to appreciate in value. c. trade deficit to increase. d. products to become more expensive to foreigners.
When quantity supplied increases at every possible price, we know that the supply curve has
a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved along the supply curve to a new point on the same curve. d. not shifted; rather, the supply curve has become flatter.