The Bank of Mesquite has $2 million in deposits and $550,000 in reserves. If excess reserves are equal to $150,000, the required reserve ratio is
A. 15%.
B. 20%.
C. 35%.
D. 65%.
Answer: B
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An unregulated, single-price monopoly is shown in the figure above. If its fixed cost is $20, the monopoly's total economic profit when it is maximizing its profit will be
A) negative. B) $0. C) $25. D) $50.
According to a model of intergenerational equity, if future generations are expected to be better off than the current generation, transfers should
A. go from the richer generation to the poorer generation. B. not be done at all. C. go from the poorer generation to the richer generation. D. be weighted by increases in the inflation rate.
Explain the Keynesian theory of money demand. What motives did Keynes think determined money demand? What are the two reasons why Keynes thought velocity could NOT be treated as a constant?
What will be an ideal response?
A firm's Lerner Index:
A. is the amount by which its price exceeds its marginal cost, expressed as a percentage of its price. B. is the amount by which its marginal cost exceeds its average cost. C. is the amount by which its average cost exceeds its marginal cost. D. is the value of its profit.