The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B
A. increases the money supply initially by $1,000.
B. reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
C. reduces the required reserves of Bank A by $1,000 and increases the required reserves of Bank B by the same amount.
D. reduces the excess reserves of Bank A by $1,000 and increases the excess reserves of Bank B by the same amount.
B. reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
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Indicate whether the statement is true or false
Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive,
A) Mexico will produce more soybeans once trade is introduced. B) the United States will produce more avocados once trade is introduced. C) avocado prices in the United States will fall once trade begins. D) soybean prices in Mexico will rise once trade begins.