The required reserve ratio in an economy is 16 percent. If two banks, Bank A and Bank B, receive deposits of $50,000 and $75,000 . respectively, then the value of the money multiplier in the economy is:
a. 10.00.
b. 12.50.
c. 6.25
d. 8.00.
c
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The French Bakery ran a special which decreased the price of its croissants from $1.50 to $1.00. Although her money income had not changed, Toni decided to buy 2 croissants instead of her usual 1 bagel and 1 croissant
Toni's actions are explained by which of the following? A) income and substitution effects B) price effect C) consumption effect D) income effect only or substitution effect only but not both effects
Assume that Sofia's marginal utility from pizza consumption is 10 utils and the price is $2.00 per slice. Further, assume that her marginal utility from scone consumption is 20 utils and the price is $3.00 per scone. Which of the following is true? a. With her existing budget she should increase her consumption of pizza
b. With her existing budget she should increase her consumption of scones. c. She is currently maximizing her utility and should not change the amount of consumption for either good with her current budget. d. If her budget increases, she should increase her consumption of pizza but not scones. e. If her budget increases, she should increase her consumption of scones but not pizza.
What is the present value of $1 that will be paid to you in 6 years if the interest rate is 10%? Work it out to the nearest tenth of a cent.
What will be an ideal response?
According to Arthur Laffer, the graph that represents the amount of tax revenue (measured on the vertical axis) as a function of the size of the tax (measured on the horizontal axis) looks like
a. a U. b. an upside-down U. c. a horizontal straight line. d. an upward-sloping line or curve.