When trade is free (unimpeded by government-instituted barriers) how are the patterns of trade and trade flows determined?
What will be an ideal response?
The patterns of trade and trade flows result from the independent decisions of thousands of importers and exporters and millions of private households and firms.
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In the late 19th century, interest rates in the U.S.:
a. tended to remain relatively constant throughout the year. b. tended to increase in the summer and decrease in the winter. c. tended to increase in the fall and winter, and decrease in the spring and summer. d. tended to rise steadily from winter through summer, and then decrease in the fall.
If the Fed sells $10 million in bonds to a bank, and the required reserve ratio is 20 percent, then the banking system can:
a. decrease the money supply by up to $10 million. b. decrease the money supply by up to $40 million. c. decrease the money supply by up to $50 million. d. decrease the money supply by up to $2 million. e. increase the money supply by up to $50 million.
When will the central bank of a country be concerned about the exchange rate?
Compared to traditional bank loans, microfinance loans
A. require collateral. B. have repayments that begin at a much later date. C. are much larger. D. are made more frequently to women than to men.