Sustained economic growth emerged in history when some nations of the world managed to create conditions where
What will be an ideal response?
people could specialize extensively and exchange relatively freely.
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According to Nobel laureate Ronald Coase, firms exist in order to
A) maximize transactions costs. B) minimize transactions costs. C) maximize transactions. D) employ workers.
As the wage rate decreases, the amount of time spent on market work usually
a. increases because the opportunity cost of nonmarket work increases b. increases because of the substitution effect c. decreases because of the income effect d. decreases because the value of leisure time increases e. decreases because the opportunity cost of leisure declines
The production of capital is a form of roundabout production
a. True b. False
A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 10 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
a. $700,000; $700,000 b. $700,000; $7,000,000 c. $300,000; $300,000 d. $300,000; $3,000,000