Exhibit 21-4  Coffee and Tea Output (Pounds Per Hour) If

question 128

Multiple Choice

Exhibit 21-4  Coffee and tea output (pounds per hour) If specialization were carried out by each country in Exhibit 21-4 on the basis of comparative advantage, then:

• A) Brazil would produce neither coffee nor tea.
• B) China would produce both coffee and tea.
• C) Brazil would produce tea and China would produce coffee.
• D) Brazil would produce coffee and China would produce tea.

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Definitions:

Excess Reserves

The reserves banks hold over and above the legal requirement set by the central bank, often seen as a precautionary measure.

Individual Bank

An individual bank refers to a financial institution dealing with deposits and loans of consumers and businesses, distinguishing itself by offering personalized banking products and services.

Depression

An intense and extended period of economic recession marked by a substantial drop in Gross Domestic Product (GDP), elevated rates of joblessness, and a decrease in the general price level of goods and services.

Aggregate Demand

The aggregate requirement for all products and services within an economy, measured at a specific overall price level and during a certain time frame.