As the period for firms to expand output is lengthened, the elasticity of the market supply curve will
a. approach zero.
b. increase.
c. decrease.
d. remain the same since time does not affect the elasticity of market supply.
B
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If the required reserve ratio (RR) is 20 percent, the simple deposit multiplier is
A) 2. B) 5. C) 10. D) 20.
Why does bad money drive out good money? Because
a. money has high liquidity so that an excess supply of money creates unnecessary money, which comes to dominate the money market b. Say's Law means that money supply creates money demand and if too much money is created, it is bad because it can create inflation c. good money is in the form of bullion (specie, such as gold) which is preferred over nonbullion money d. people will not use bad money for exchange because it means exchanging it away so that bad money never serves the role of money e. people will not use good money for exchange because it means exchanging it away so that good money never serves the role of money
One concern of those who oppose the central bank targeting inflation at zero is that reducing inflation is costly. What is the cost of reducing the inflation rate?
If a central bank increases the money supply growth rate, then in the short run
a. unemployment rises. In the long run the short-run Phillips curve shifts right. b. unemployment rises. In the long run the short-run Phillips curve shifts left. c. unemployment falls. In the long run the short-run Phillips curve shifts right. d. unemployment falls. In the long run the short-run Phillips curve shifts left.