If the budget line shifts from BB to bb in the above diagram we can infer that the:
A) price of Y has increased and the price of X has decreased.
B) price of Y has decreased and the price of X has increased.
C) prices of both X and Y have increased.
D) prices of both X and Y have decreased.
Ans: A) price of Y has increased and the price of X has decreased.
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The East Asian model's approach to interest rates has been
a. to keep interest rates well below market levels b. to keep interest rates above market levels c. to allow the market to determine interest rates d. to allocate investment funds entirely through government, and not charge any interest e. none of the above
If a firm's short-run total cost curve lies above its total revenue curve at all output levels, the goal of the firm should be to
a. minimize total cost b. maximize total revenue c. minimize its loss d. minimize marginal cost e. maximize marginal revenue
A single bank with $20,000 of reserves and a reserve ratio of 5 percent could support total transactions account balances of at most
A. $1,000. B. $100,000. C. $20,000. D. $400,000.
Because a bank pays a lower interest rate on deposits than it charges on loans, it cannot fail
a. True b. False Indicate whether the statement is true or false