Bank deposit creation is limited by
A. reserve requirements.
B. the interest rate.
C. whether a bank is nationally or state chartered.
D. whether a bank is in a large city or rural area.
A. reserve requirements.
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One of the long-run effects of higher government budget deficits is
A) a redistribution of real Gross Domestic Product (GDP) away from government-provided goods and toward more privately provided goods. B) an increase in the government's share of the nation's economic activity. C) growth in the economy's private sector at the same time the government sector shrinks. D) a fall in the equilibrium price level.
If Colombia has a comparative advantage over Mexico in the production of coffee, then:
A. Colombia probably sells coffee to Mexico. B. Mexico is more productive at making coffee than Colombia. C. Colombia has the ability to produce more coffee than Mexico with the same resources. D. Mexico should trade coffee to Colombia.
Refer to the graph shown. Suppose the market price is $4. At this price, a perfectly competitive firm should:
A. shut down in the short run but continue production in the long run. B. continue to produce in the short run but shut down in the long run. C. continue to produce in both the short run and the long run. D. shut down immediately.
Graphically illustrate and explain the effects of an increase in the rate of technological progress on the Solow growth model. In your answer, you must clearly label all curves and the initial and final equilibria. In your answer, explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in the rate of technological
progress. What will be an ideal response?