One reason why banks might increase their reserve-deposit ratio above the minimum level in times of economic uncertainty is that banks:
A. may find only limited lending opportunities that seem sufficiently safe.
B. may have insufficient required reserves.
C. are initiating quantitative easing.
D. are most profitable when new loans are issued.
Answer: A
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Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that
A) living standards may differ in the two countries because we don't know how income is distributed in the countries. B) economic well being is the same in both countries. C) living standards in the two countries are probably identical, or very close to each other. D) life expectancies are the same in both countries.
The presence of ________ creates a difference in the value between the market price and the factor cost of a product
A) indirect taxes and consumption B) subsidies and direct taxes C) corporate profits and subsidies D) indirect taxes and subsidies
Last year, the Pottery Palace supplied 8,000 ceramic pots at $40 each. This year, the company supplied the same quantity of ceramic pots at $55 each. Based on this evidence, The Pottery Palace has experienced
A) an increase in the quantity supplied. B) a decrease in supply. C) a decrease in the quantity supplied. D) an increase in supply.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. The quantity of real
loanable funds per time period rises and net nonreserve international borrowing/lending balance becomes more positive (or less negative). b. The quantity of real loanable funds per time period rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The quantity of real loanable funds per time period falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. The quantity of real loanable funds per time period and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.