This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were open to free trade, it would:
A. export this good because the world price is greater than the domestic price.
B. import this good because the world price is greater than the domestic price.
C. import this good because the domestic price is greater than the world price.
D. export this good because the domestic price is greater than the world price.
Answer: A
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The reserve ratio is 20 percent. The Fed buys $1 million in government securities from a bond dealer by transmitting the funds to the dealer's deposit account at Bank A Bank A loans the maximum amount possible to a construction company, which buys materials from a lumber yard. The lumberyard deposits the construction company's check in Bank B. What is the maximum loan Bank A can now make and the maximum loan Bank B can now make?
A) Bank A: 0; Bank B: $640,000 B) Bank A: 0; Bank B: $800,000 C) Bank A: $800,000; Bank B: $640,000 D) Bank A: $800,000; Bank B: 0
The demand for dollars will increase when
A) real interest rates in the United States fall. B) U.S. labor productivity increases relative to the world. C) the world is perceived as more stable than it used to be. D) U.S. residents develop a taste for more imported products.
If the four-firm concentration ratio in an industry increases, the industry
a. must have become more competitive. b. must have become a monopoly. c. must have become less competitive, although not necessarily a monopoly. d. may or may not have become less competitive.
A market economy allocates resources primarily in accordance with orders from government bureaucrats
a. True b. False Indicate whether the statement is true or false