The benefits to trading nations based on comparative advantage accrue from:
A. Specialization only
B. Specialization and trading
C. Trading only
D. Protection of domestic industries
B. Specialization and trading
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If the price of a product increases
A) there is an increase in quantity supplied and a decrease in demand. B) there is an increase in supply and a decrease in quantity demanded. C) there is an increase in supply and a decrease in demand. D) there is an increase in quantity supplied and a decrease in quantity demanded.
The banking system currently holds $20 billion in required reserves and zero excess reserves. The Fed lowers the required reserve ratio from 15 percent to 12.5 percent. Assuming that there are no cash leakages, the resulting change in checkable deposits (or the money supply) is approximately
A) $2.7 billion. B) $1.5 billion. C) $2.0 billion. D) $12.5 billion. E) $26.6 billion.
With flexible exchange rates, the imbalance between debits and credits arising from shifts in currency demand and/or supply is accommodated by ______.
a. special financial borrowings b. fixed exchange rates c. changes in currency prices d. reserve movements
Which of the following is TRUE?
A) Monopoly results in a higher quantity of output being sold compared with perfect competition. B) Price discrimination occurs when there are differences in prices that reflect differences in marginal cost. C) Charging all customers the same price when costs vary can actually be a case of price discrimination. D) Price discrimination guarantees that the monopolist will make a profit.