If the World Supply Curve Is S_W0

question 31

Multiple Choice

If the world supply curve is S_W0,

• A)there is a trade deficit.
• B)there is a trade surplus.
• C)trade is in balance.
• D)there is no trade.

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for monetary policy, including regulating interest rates and managing the country's money supply.

Required Reserves

Funds that banks must hold in reserve and cannot lend out, either as cash in their vaults or as deposits with a central bank.

Excess Reserves

Excess reserves are the funds that banks hold over and above the required reserve ratio set by the central bank, representing additional liquidity that can be used for lending.

Checkable Deposits

Bank accounts against which checks can be drawn. These include checking accounts, demand deposits, and any other deposit accounts from which checks can be written.