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If the Fed wishes to increase the money supply it can:

Decrease the discount rate.

The policy lever most commonly used by the Fed is:

Buying and selling bonds.

If the Fed sells more bonds to the public, then the money supply will:

Decrease and the aggregate demand curve will shift to the left.

If a country has a trade deficit, it:

Imports more than it exports.

The amount by which the value of imports exceeds the value of exports in a given time period is a:

Trade deficit.

Specialization and trade:

Increase the standard of living.

Consumption possibilities refers to the:

Alternative combinations of goods and services that a country can consume.

Comparative advantage refers to a country's:

Ability to produce a specific good at a lower opportunity cost than another country.

If a country can produce rice with a lower opportunity cost than its trading partners, then it must have:

A comparative advantage in the production of rice.

Terms of trade refer to:

The rate at which goods are exchanged for one another.

Which of the following is the result of a tariff?

Greater domestic production.

A tariff on imported goods will cause:

A decrease in imports and an increase in domestic sales.

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