Economic growth in Lillian’s country has been very slow. Which of the following offers the most likely explanation for this?
a. The population is increasing rapidly.
b. The standard of living is low.
c. Too much of the nation’s resources are being invested in technology.
d. People are saving too much of their income instead of consuming.
d. People are saving too much of their income instead of consuming.
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The case of New Zealand, described in the text, concludes that a country's current account deficits are not sustainable if a country's
A) prospects for long term economic growth are above its global deficit growth. B) ability to sustain current account deficits is questionable. C) unproductive industrial sectors and its prospects for long run growth. D) labor productivity is below that of most other countries. E) exchange rate has fallen relative to other currencies.
Which of the following does not characterize a competitive market?
A.) Many firms B.) Advertising by individual firms C.) Low barriers to entry D.) Zero economic profit in the long run
Assume a reserve requirement of 10 percent. A commercial bank has total reserves of $100,000, excess reserves of $25,000, and total checkable deposits outstanding of $750,000. If the reserve requirement were increased to 15 percent,
a. total expansion of the money supply would be limited to $750,000. b. excess reserves would be decreased to $12,500. c. the bank would have no alternative but to decrease its check able deposits. d. the bank would be $12,500 short of required reserves.
If the price of ice cream rose to $30 per gallon, consumers would purchase fewer gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price were $5 per can. These relationships illustrate the
a. law of supply. b. law of demand. c. difference between normal and inferior goods. d. difference between substitute and complement goods.