The total assets of commercial banks in 2015 amounted to:
A. about one-half of nominal GDP in the U.S.
B. three times nominal GDP in the U.S.
C. about one-tenth of nominal GDP in the U.S.
D. about four-fifths of nominal GDP in the U.S.
Answer: D
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An increase in household saving causes consumption to
a. rise and aggregate demand to increase. b. rise and aggregate demand to decrease. c. fall and aggregate demand to increase. d. fall and aggregate demand to decrease.
Banks hold reserves:
A. to increase profits. B. to meet depositor withdrawals and payments. C. only because the government requires them to hold reserves. D. to earn interest.
According to the principle of comparative advantage, total output and consumption levels will be highest when goods are produced in nations according to which of the following conditions?
A. Opportunity costs are lowest. B. Absolute advantages are highest. C. Opportunity costs are equal. D. Absolute advantages are lowest.
If the domestic interest rate increases, while the foreign interest rate and the expected spot exchange rate remain constant, the return comparison shifts in favor of investments in bonds denominated in the foreign currency.
Answer the following statement true (T) or false (F)