Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Suppose Country B's population of workers increased to 600. We can say:
A. Country B now possesses the absolute advantage in the production of both goods.
B. Country B now possesses the absolute advantage in tablets only.
C. Country B now has the comparative advantage in iPod production.
D. Country B has no need to trade now.
A. Country B now possesses the absolute advantage in the production of both goods.
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In the above figure, if the interest rate is 8 percent
A) people sell bonds so as to convert them into money. B) people buy bonds and the interest rate falls. C) the Fed increases the quantity of money. D) people buy stocks, because stocks are more liquid than currency.
Which of the following is a market in which banks lend reserves to one another?
A) required reserve market B) open market C) discount market D) federal funds market