If Resources and Goods Are Free to Move Across States

question 65

Multiple Choice

If resources and goods are free to move across states, if Oregon producers choose to specialize in producing honey and California producers choose to specialize in growing almonds, then we could reasonable conclude that:

• A)California has a comparative advantage in producing almonds.
• B)Oregon has a comparative advantage in producing honey.
• C)the opportunity cost of growing almonds is lower in California than in Oregon.
• D)the opportunity cost of producing honey is lower in Oregon than in California.
• E)all of the above are true.

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Definitions:

Reserve Requirements

Regulations set by central banking authorities that determine the minimum amount of reserves that banks must hold against deposits.

Lending Ability

The capacity of financial institutions to provide loans to individuals or businesses, based on available capital and regulatory constraints.

United States Government Securities

Financial instruments issued by the federal government to finance its budget deficits and raise capital, including Treasury bonds, notes, and bills.

Interest Rate

The rate at which a borrower pays interest to a lender for borrowing money.