APMIC-BANK ALiabilitiesAssetsActual reserves5,0001

BANK A Liabilities Assets Actual reserves

5,000

1,000 Demand deposits Loans

4,000 BANK B Liabilities Assets Actual reserves

100

600 Demand deposits

500 Loans BANK C Liabilities Assets Actual reserves

10

100 Demand deposits Loans

90 19. Based on the balance sheets above for three different banks, which of the following is true, if the reserve requirement is 10 percent? (A) Bank A has no excess reserves. (B) Bank B has no excess reserves. (C) Bank B can increase its loans by

500. (D) Bank B can increase its loans by $40. (E) Bank C has excess reserves.

C

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X Y Z W CONSUMPTION GOODS 45. The diagram above shows the production possi- bilities curve for an economy that produces only consumption and capital goods. All of the following statements about this economy are true EXCEPT: (A) Producing at point Z results in the underutilization of resources. (B) The combination represented by point Y is unattainable, given the scarcity of resources. (C) Resources are fully utilized at points W and X. (D) Producing at point X will result in greater economic growth than will producing at point W. (E) Point X represents the most efficient combination of the two goods that can be produced by this economy.

C

Key Concept

The production possibilities curve (PPC) represents the maximum combination of goods that an economy can produce given its resources and technology.

Explanation

The statement that is not true about the economy represented by the PPC is option C. Resources are not fully utilized at points W and X. Point W represents underutilization of resources, while point X represents full utilization of resources.

What is the significance of producing at point X on the production possibilities curve?, Generate me a similar question

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