A country is most likely to have a comparative advantage in the production of cars if:
A. its citizens prefer driving cars to other forms of transportation.
B. it imports most of the raw materials necessary to produce cars.
C. it has strict environmental protection laws governing automobile emissions.
D. it has a relative abundance in the natural resources needed to produce cars.
Answer: D
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Other things constant, which of the following would cause the M2 money supply to decline?
a. an increase in the quantity of U.S. currency held overseas b. a shift of funds from interest-earning checking accounts to money market mutual funds c. a reduction in the general public's holdings of currency outside of banks because debit cards have become more popular and widely accepted d. a shift of funds from money market mutual funds into stock and bond mutual funds because the fees to invest in the latter have declined
Why are banks using more automatic teller machines (ATMs) and employing fewer human tellers? What economic principle is illustrated about resource markets by this example?
What will be an ideal response?