Homothetic tastes are always tastes over essential goods.
Answer the following statement true (T) or false (F)
False
Rationale: Tastes for perfect substitutes are homothetic -- but neither good is essential in that case.
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If the amount of high-powered money were 100 and the bank reserve holding ratio was 0.25 then the maximum stock of deposits would be (assume that citizens prefer to keep 10% of their money as cash)
A) 100/0.25 times 1.1 which is 440. B) 100/0.35 which is approximately 286. C) 100/0.35 times 1.1 which is approximately 314. D) 100/0.10 which is 1000.
The designate M1 measure of money consists of
A) the most liquid types of money in the U.S. system. B) small time deposits only. C) credit cards and ATM cards. D) gold and gold coins.
If the supply of good A is perfectly elastic, a decrease in demand will: a. reduce the equilibrium quantity traded, but leave the price unchanged. b. reduce the equilibrium quantity traded, and reduce the price
c. reduce the equilibrium price, but leave the quantity traded unchanged. d. reduce the equilibrium price traded, but increase the quantity traded.
For an intertemporal budget constraint concerning saving for retirement, the choice is between present consumption and future consumption.
a. Fungible b. Utility-maximizing c. Intertemporal choice d. Backward-bending