Could an increase in the demand for compact cars give an American automobile producer a comparative advantage in their production?
A) No, because comparative advantage depends entirely on productive capabilities.
B) No, because changes in demand can only affect the price of compact cars.
C) Yes, but only if it leads to a change in the techniques of production.
D) Yes, by making compact-car production more profitable.
D
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The income elasticity of demand measures
A) the income effect of a change in price. B) the responsiveness of quantity demanded to changes in income. C) how a consumer's purchasing power is affected by a change in the price of a product. D) the percentage change in the price of a product divided by the percentage change in consumer income.
If the Fed lowers the required reserve ratio, __________ in the banking system will remain unchanged but __________ will rise. This will (likely) lead to an increase in new loans and checkable deposits and a(n) __________ in the money supply
A) excess reserves; vault cash; increase B) reserves; vault cash; decrease C) reserves; excess reserves; increase D) reserves; required reserves; increase E) none of the above