If Nations Begin to Expand Their Specialization in Production for the Purpose

question 80

Multiple Choice

If nations begin to expand their specialization in production for the purpose of trade,

• A)​consumer surplus will increase, but not total output.
• B)​total world output will increase, and consumer surplus will increase as well.
• C)​total world output will increase, but consumer surplus will not increase.
• D)​neither total output nor consumer surplus will change.

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Definitions:

Report Rates

The interest rates reported by financial institutions, often related to loans or deposits, to regulatory bodies or in their financial statements.

LIBOR

The London Interbank Offered Rate is a standard interest rate used by leading international banks for loans to each other.

Federal Funds Rate

The Federal Funds Rate is the interest rate at which depository institutions lend reserves maintained at the Federal Reserve to other depository institutions overnight.

Bankers' Acceptances

Short-term credit investments created by a non-financial firm and guaranteed by a bank.