The United States can use all its resources to produce 250 DVDs or 500 shoes. China can use all of its resources to produce 30 DVDs or 300 shoes. The opportunity cost of producing a DVD in the United States is
A) 500 shoes. B) 1 DVD. C) 1/2 of a shoe. D) 20 shoes. E) 2 shoes.
Question 2
If the required reserve ratio is 15 percent, there is no currency drain, and banks loan all of their excess reserves, an increase in the monetary base of 20,000 leads to a total increase in the quantity of money of
A) 200,000. B) 133,333. C) 3,000. D) 20,000. E) 300,000.
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