Specialization and trade allow an economy to expand its:
A. production possibilities.
B. consumption possibilities.
C. technological advantage.
D. absolute advantage.
Answer: B
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In the figure above, what is the efficient quantity of pesticide to produce?
A) 300 tons per month B) 240 tons per month C) 180 tons per month D) 360 tons per month
If the Federal Reserve sells $1,000 in bonds and the required reserve ratio is 0.1 (assume banks hold no excess reserves) what will be the total change in reserves at all banks?
a. $10,000 b. $1,000 c. -$10,000 d. -$1,000 e. -$1,100
Other things equal, which of the following is true?
a. A reduction in prices will increase the real wealth of those holding a fixed quantity of money. b. A reduction in prices will lead to a decline in net exports. c. A reduction in prices will increase the scarcity of money, raise the real interest rate, and, thereby, encourage investment and consumption. d. A reduction in prices will increase profit margins and, thereby, stimulate additional investment.
If the long-run market supply curve is perfectly elastic, a fall in demand will cause the final equilibrium to be at:
A. the same price and the same output. B. a lower price and a lower output. C. a lower price but the same output. D. the same price but a lower output.