Table 19-11
Production and
Consumption Production
Without Trade with Trade

question 358

Multiple Choice

Table 19-11
Production and
Consumption Production
Without Trade With Trade
$$\begin{array} { | l | l | l | l | l | l | } \hline & \text { Clucks } & \text { Huts } & & \text { Clocks } & \text { Hats } \\\hline \text { Derrnark } & 900 & 150 && 1,200 & 0 \\\hline \text { Belize } & 150 & 100 && 0 & 400 \\\hline\end{array}$$
Denmark and Belize can produce both clocks and hats.Table 19-11 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-11.With trade,what is the total gain in clock production?

• A)150
• B)300
• C)2,100
• D)2,250

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Definitions:

Deposit Multiplier

The ratio of the amount of deposits created by banks to the amount of new reserves.

Reserve Ratio

The fraction of depositors' balances banks must have on hand as cash, a regulatory requirement designed to ensure banks' liquidity and stability.

Inflation

The pace at which prices for goods and services broadly ascend, causing the value of money to decrease.

Federal Reserve System

The central banking system of the United States, responsible for regulating the national money supply and ensuring financial stability.