If the required reserve ratio is 4 percent, then $100 of reserves can support up to $2,500 of checkable deposits
a. True
b. False
Indicate whether the statement is true or false
True
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For a given inflation rate, if increasing threats to domestic security cause the government to increase military spending, then the ________ shifts ________.
A. aggregate demand curve; left B. aggregate demand curve; right C. short-run aggregate supply line; downward D. short-run aggregate supply line; upward
Economic models explore decision making by individuals, firms and other organizations
Indicate whether the statement is true or false
Insurance companies create wealth by
a. reducing the amount of risk that risk averse individuals must bear b. reducing the amount of risk that risk loving individuals must bear c. increasing the amount of risk that risk averse individuals must bear d. moving an asset from low to high value use
In a "pure exchange" market:
a. resources are owned only by the government. b. resources are owned by few people. c. people trade money for goods that are produced in the domestic economy. d. there is no production and people trade money for goods that already exist.