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(01.01–01.03, 05.06 HC) Assume that Atlantis and the Mushroom Kingdom use equal resources to produce consumer and capital goods, as illustrated in the table below showing maximum possible production figures. Country Capital Goods Consumer Goods Atlantis 60 units 180 units Mushroom Kingdom 20 units 100 units Draw a fully labeled production possibility curve for Atlantis. Place capital goods on the vertical axis and consumer goods on the horizontal axis. Assume constant opportunity cost. On your graph from part (a), label an inefficient point of production I, an efficient point of production E, and an unattainable point of production U. Which country has the comparative advantage in the production of capital goods? Explain. If Atlantis shifted from producing 10 units of capital goods and 150 units of consumer goods to producing 24 units of capital goods and 108 units of consumer goods, what would be the impact on its economic growth in the long run? Based on the data table, what range of capital goods could be traded for 15 units of consumer goods that would be mutually beneficial?

(04.03 MC) If the central bank of a country decides to print an additional $125,000 currency, it will initially add to the ________ and will ________ the M1 in the economy.

(04.07 MC) A real rate of interest lying above the equilibrium level corresponds to what situation in the loanable funds market?

(04.07 LC) The equilibrium in the market of loanable funds determines the

(04.04 MC) Use the given data table to answer the question below. Asset (billion $) Liability (billion $) Required reserves 800 Primary deposits 8,000 Loans 7,200   Total 8,000 Total 8,000 What is the value of the money multiplier given the data above?

(04.05 MC) If the nominal interest rate increases, ceteris paribus, which of the following things will occur?

(04.04 MC) Use the data table to answer the question that follows. Assets Liabilities Actual Reserves $6,000 Demand deposits $40,000 Loans $34,000   Assume the reserve requirement is 10%. Based on this small bank’s data, what is the maximum amount in new loans that it could give?

(04.07 LC) In the loanable funds market, supply is driven primarily by ________ and demand by ________

(04.06 MC) Which of the following holds true when the Fed conducts a contractionary open-market operation?

(04.05 MC) Use the graph to answer the question that follows.Assuming that a money market is initially in equilibrium at point B, which of the following points on the graph best represents the new point of equilibrium if there is an increase in the GDP of the country, all else constant?