If people decide to hold some of their cash and not deposit it, then the:
A. money multiplier overestimates how much money will be created in the economy.
B. reserve ratio is not fully functioning, and should be raised.
C. reserve ratio is not fully functioning, and should be lowered.
D. money multiplier underestimates how much money will be created in the economy.
Answer: A
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In the extreme case of a complete crowding-out effect
A) an increase in interest rates will stimulate investment spending. B) an increase in government spending will not increase aggregate demand. C) an increase in tax rates will stimulate work effort. D) an increase in government spending will stimulate investment spending.
If policies of the Fed cause the money supply to increase, and velocity is held constant, the expected outcome would be: a. P Q would increase, and the general price level would increase if Q remained constant. b. P Q would decrease, and the general price level would decrease if Q remained constant. c. P Q would decrease, and the general price level would increase if Q increased
d. insufficient information is available to arrive at a conclusion.
A pizza is
a. excludable and rival in consumption. b. excludable and nonrival in consumption. c. nonexcludable and rival in consumption. d. nonexcludable and nonrival in consumption.
Many manufacturers attempt to build fairly close relationships with the firms that supply their packaging and boxes. Why?
What will be an ideal response?