The price of trade Suppose that Greece and Austria both produce jeans and wine. Greece's opportunity cost of producing a bottle of wine is 3 pairs of jeans while Austria's opportunity cost of producing a bottle of wine is 11 pairs of jeans. By comparing the opportunity cost of producing wine in the two countries, you can tell that production of wine and has a comparative advantage in the has a comparative advantage in the production of jeans Suppose that Greece and Austria consider trading wine and jeans with each other. Greece can gain from specialization and trade as long as it receives more than of jeans for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as t receives more than of wine for each pair of jeans it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of jeans) would allow both Austria and Greece to gain from trade? a) 13 pairs of jeans per bottle of wine b) 6 pairs of jeans per bottle of wine c) 2 pairs of jeans per bottle of wine d) 1 pair of jeans per bottle of wine

Uppose that the federal reserve purchases a bond for $100,000 from donald truck, who deposits the proceeds in the manufacturer’s national bank. what will be the impact of this purchase on the supply of money? the money supply will increase by $100,000. the money supply will increase by $80,000. the money supply will increase by $500,000. this action will have no effect on the money supply. if the reserve requirement ratio is 20 percent, what is the maximum amount of additional loans that the manufacturer’s bank will be able to extend as the result of truck’s deposit? the maximum additional loans is $100,000. the maximum additional loans is $80,000. the maximum additional loans is $20,000. the maximum additional loans is $500,000. given the 20 percent reserve requirement, what is the maximum increase in the quantity of checkable deposits that could result throughout the entire banking system because of the fed’s action? this action will have no effect on the money supply. the money supply will eventually increase by $80,000. the money supply will eventually increase by $500,000. the money supply will eventually increase by $100,000.