The reserve ratio is 20 percent. The Fed buys? $1 million in government securities from a bond dealer by transmitting the funds to the? dealer's deposit account at Bank A. Bank A makes the maximum loan possible to a construction? company, which buys materials with the loan. The check is deposited in Bank? B, which loans out all it can to a car dealership. To this? point, the money supply has increased by
A) $1 million
B) $1.8 million
C) $2.44 million
D) $3 million.
Ans: C) $2.44 million
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The average duration of unemployment
A) decreases during recessions and increases during expansions. B) increases during recessions and decreases during expansions. C) does not vary with the business cycle. D) decreases all the time. E) increases all the time.
If the price of gasoline increases from $2.50 per gallon to $3
00 per gallon and the quantity demanded goes down from 120 million gallons per week to 115 million gallons per week, the absolute value of price elasticity of demand in that price range is approximately A) 0.23. B) 4.35. C) 0.93. D) 2.34.
One means of enforcing a quota is to require importers to ________.
A. obtain a license B. pay a sales tax C. obtain a sales permit D. pay an import tax
Consider the market for the normal good hotdogs. Suppose the number of hotdog consumers increases and the wages of hotdog workers decreases. Once equilibrium is re-established in the market it can be predicted that the equilibrium price of hotdogs will ___
Fill in the blank(s) with the appropriate word(s).