The United States Produces Both Automobiles and Computers More Efficiently

question 114

Multiple Choice

The United States produces both automobiles and computers more efficiently than Mexico.Nevertheless, it is possible that both nations would benefit from trade in these items.The reason for this is

• A)the law of comparative advantage.
• B)the inflation-unemployment trade-off.
• C)externalities.
• D)the cost disease of personal services.
• E)attempts to repeal the law of supply and demand.

Understand how the money supply and demand respond to changes in price levels and credit availability.

Comprehend the consequences of federal deregulation on the savings and loan industry.

Recognize the processes of money creation and destruction.

Distinguish between different measures of money supply (M1, M2, M3).

---

Definitions:

Convertible Bond

A convertible bond is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company, usually at certain times during its life.

Common Stock

A type of equity security that represents ownership in a corporation and entitles the holder to vote at shareholder meetings and receive dividends.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of an asset.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.