The budget constraint shows the
A) combinations of goods that generate the same amount of total satisfaction.
B) possible combinations of goods that can be purchased with a specified income.
C) changes in consumption of goods that a consumer makes when his income increases.
D) amount of a good the consumer will buy at various prices.
Answer: B
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Suppose a bank has $600,000 in deposits, a reserve ratio of 20 percent, and bank reserves of $240,000. This bank can make new loans in the amount of
A) $840,000. B) $360,000. C) $120,000. D) $12,000.
Everything else held constant, a shift in tastes in the U.S. toward Mexican goods will ________ net exports in the U.S. and cause the quantity of aggregate output demanded to ________ in Mexico
A) decrease; rise B) decrease; fall C) increase; rise D) increase; fall