What assumption does the Ricardian model of comparative advantage make in terms of converting resources?
What will be an ideal response?
it assumes that all resources can easily shift from one thing to another
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The Fed's low short-term interest rate policy from 2002-2004, along with housing regulations promoting low down-payment loans to sub-prime borrowers, encouraged
a. conventional 30-year, fixed rate mortgages which have relatively high default and foreclosure rates. b. conventional 30-year, fixed rate mortgages which have relatively low default and foreclosure rates. c. adjustable rate mortgages which have relatively low default and foreclosure rates. d. adjustable rate mortgages which have relatively high default and foreclosure rates.
The utility-maximizing rule:
A) is inconsistent with the law of demand. C) implies a leftward shifting demand curve. B) implies a perfectly elastic demand curve. D) is consistent with the law of demand.
Which of the following Fed actions increases the money supply?
A. Increasing reserve requirements B. Selling government securities in the open market C. Decreasing the amount of loans made to commercial banks D. Buying government securities in the open market
Consider two straight-line PPFs. They have the same vertical intercept, but curve I is flatter than curve II. The opportunity cost of producing the good on the horizontal axis
What will be an ideal response?