Consider a many-worker economy with two goods. With access to international trade, a country can consume the greatest amount of both goods by producing at the point where the
A. production possibilities curve intersects the horizontal axis.
B. slope of consumption possibilities curve is greater than the slope of the production possibility curve.
C. consumption possibilities curve intersects the production possibility curve.
D. slope of production possibilities curve is equal to slope of consumption possibilities curve.
Answer: D
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Why does the holding of excess reserves by banks and the holding of currency by households and firms cause the real-world deposit multiplier to be less than the simple deposit multiplier?
What will be an ideal response?
Refer to Figure 24-2. Ceteris paribus, an increase in the expected future price level would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
China's high net exports must be balanced by:
A. low net capital outflows. B. high net capital inflows. C. high net capital outflows. D. low net imports.
Which of the following may be explained by adverse selection?
a. When banks raise the interest rate on loans, high-risk applicants leave the market. b. When health insurance companies decrease insurance charges but increase deductibles, less healthy people are more willing to purchase insurance. c. As the cost of insurance rises, low-risk applicants reduce their coverage. d. Products are sold at prices that reflect their true value. e. Loan companies do not require down payments.