Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 cash deposit, then, excluding the $1,000 initial deposit, the banking system can increase the money supply by:

Assuming the economy in the graph shown is currently at equilibrium A, if the government wanted to enact a policy it would likely enact:

A. contractionary fiscal policy in an effort to move aggregate demand to the left. B. contractionary fiscal policy in an effort to move aggregate demand to the right. C. expansionary fiscal policy in an effort to move aggregate demand to the right. D. expansionary fiscal policy in an effort to move aggregate demand to the left.

The principle of comparative advantage

A. applies only when the gold standard is in effect. B. is the basic reason that the United States has been running trade deficits. C. states that it is advantageous to export more than you import. D. states that total output is greatest when each product is made by the country that has the lowest opportunity cost.