Young drivers often buy used cars. An increase in the legal driving age to twenty-one shifts the demand curve for used cars leftward, whereas lowering the age to fifteen shifts the demand curve rightward
Indicate whether the statement is true or false
TRUE
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If the Fed increases the quantity of reserves, a new equilibrium is reached by a
A) leftward shift of the demand for reserves curve. B) movement down the demand for reserves curve. C) movement up the demand for reserves curve. D) rightward shift of the demand for reserves curve. E) None of the above answers is correct.
According to the quantity theory of money, inflation is caused by
A) the money supply growing faster than real GDP. B) GDP growing at the same rate as the money supply. C) the money supply growing slower than real GDP. D) GDP growing faster than the money supply.
A bank lending depositors' money to a local business and a pension fund investing contributions in shares of a company are similar financial activities in that
A) both involve the use of financial markets. B) both involve funds being channeled from savers to borrowers through financial intermediaries. C) both involve a reduction in the overall level of liquidity in the financial system. D) both involve in an increase in the overall level of risk in the financial system.
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. Which of the following statements is true?
a. Brazil has an absolute advantage in producing only coffee. b. Brazil has an absolute advantage in producing only sugar. c. Chile has an absolute advantage in the production of both coffee and sugar. d. Chile has an absolute advantage in producing only coffee. e. Brazil has an absolute advantage in the production of both coffee and sugar.