When loans are repaid at commercial banks:
A. Money is created
B. Money is destroyed
C. The assets of commercial banks increase
D. The net worth of commercial banks increases
B. Money is destroyed
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Explain why Hong Kong has experienced faster economic growth than the United States
What will be an ideal response?
If a country has an overvaluation problem, the best solution is to
A) increase the official rate. B) buy less of its currency in the foreign exchange market. C) sell more of its currency in the foreign exchange market. D) decrease the money supply.
If nation A can produce a product at a lower opportunity cost per unit than nation B, nation A
A. has a specialization advantage. B. has an absolute advantage. C. has a comparative advantage. D. has a production advantage.
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.