Because of NAFTA, the U.S. shifts some of its imports from Europe to Mexico (a member of NAFTA). This is an example of

The source of diminishing returns is

A. that when each worker is equally capable, each worker adds to production exactly the same as the previous one. B. the fact that anytime you increase labor you get more output. C. the efficiency that results from workers specializing in one aspect of production. D. the inefficiency that results from the fact that capital is fixed.

If the banking system has demand deposits of $100,000, total reserves equal to $15,000, and a required reserve ratio of 10 percent, the banking system can increase the volume of loans by a maximum of

A. $50,000. B. $5,000. C. $85,000. D. $100,000.