A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:
Refer to the above table. If the nation produces more and more tanks, the opportunity cost of each additional tank in terms of autos:
A. Remains constant
B. Falls
C. Increases
D. Cannot be measured
Answer: C
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If there is no one who is interested in borrowing from a bank,
a. the bank's excess reserves will be zero b. there will be no process of money creation c. the full money multiplier potential will be reached d. the legal reserve requirement must be equal to zero e. the legal reserve requirement must be equal to 100 percent
Refer to the above diagram. The budget line shift which moves the consumer's equilibrium position from point A to point B suggests:
A) an increase in the quantity of Y demanded. B) a decrease in the quantity of Y demanded. C) a leftward shift in the demand curve for Y . D) a rightward shift in the demand curve for Y .
The inflation associated with the oil price shocks in the 1970s after OPEC restricted the supply of oil is an example of
A. cost-push inflation due to a demand shock. B. cost-push inflation due to a supply shock. C. demand-pull inflation due to a supply shock. D. demand-pull inflation due to a demand shock.
A bank's assets are
A) things owned by or owed to the bank. B) things the bank owes to someone else. C) a measure of the bank's net worth. D) always greater than the bank's liabilities.