If a regional trading agreement causes products from member countries to replace imports from nonmember countries, then the regional trading agreement will experience:
a. economic gains.
b. trade creation gains.
c. trade diversion losses.
d. trade perversion
Ans: c. trade diversion losses.
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Opportunity costs are
A) always marginal costs. B) never marginal costs. C) not related to marginal costs. D) sometimes marginal costs. E) sunk costs.
The use of collateral
A) allows banks to charge higher interest rates on loans. B) makes it more costly for borrowers to take advantage of their asymmetric information. C) makes it more costly for lenders to take advantage of their asymmetric information. D) has important tax implications for both borrowers and lenders.
If the total amount of demand deposits in the country increases by $12,000 after the Fed purchases $6,000 in bonds, what is the required reserve ratio?
a. 0.4 b. 0.1 c. 0.2 d. 0.5 e. 0.3
If a perfectly competitive firm cannot avoid economic losses, it should continue to operate in the short run as long as
a. marginal revenue exceeds average fixed cost b. price exceeds average total cost c. the market price exceeds average total cost d. the marginal revenue is less than the average variable cost e. price exceeds average variable cost