Assume that the currency—deposit ratio is 0.2 and the reserve—deposit ratio is 0.1. The Federal Reserve carries out open-market operations, purchasing $1 million worth of bonds from banks. This action will increase the money supply by

Government goods are provided to the consumer at a zero price. This means that

A) the cost to society is zero. B) the political system is run by proportional rule. C) people are getting something for nothing. D) the cost of the goods is the value of the resources used to produce the good.

Suppose that the U.S. government is trying to garner support from Central American countries to pass the newest free trade agreement, Central American Free Trade Agreement (CAFTA). Why might Central American countries argue that in terms of agricultural

products, trade with the United States is not really truly competitive? What will be an ideal response?