Use the Following to Answer Questions

question 197

Multiple Choice

Use the following to answer questions:
Figure: The Production Possibilities for Two Countries
-(Figure: The Production Possibilities for Two Countries) Look at the figure The Production Possibilities for Two Countries. Indonesia has an absolute advantage in producing:

• A)radios.
• B)tires.
• C)both radios and tires.
• D)neither radios nor tires.

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Definitions:

Required Reserve Ratio

A regulation that sets the minimum reserves each bank must hold to customer deposits and notes, effectively the same concept as the reserve-requirement ratio but stated differently.

Commercial Banks

Financial institutions that provide services such as accepting deposits, providing business loans, and offering basic investment products.

Government Securities

Financial instruments issued by the government to finance its expenditures, including bonds, notes, and bills, that pay interest to investors.

Dollar Amount

The value of an item or transaction expressed in U.S. dollars, a common measure for comparing financial value.