Assuming all else equal, inflation can:
A) reduce the real interest rate, and increase the real wage rate.
B) increase both the real interest rate and the real wage rate.
C) increase the real interest rate, and reduce the real wage rate.
D) reduce both the real interest rate and the real wage rate.
D
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Used car buyers believe a car is good quality when the seller signals the car's quality by offering a warranty because
A) car sellers would never lie. B) car buyers are gullible. C) the signal cannot be false. D) a false signal can be costly to the seller.
Suppose you found $3,000 hidden in your closet and deposited it in a demand deposit account at your bank. If the reserve requirement was 40 percent, the deposit would directly create ____ in excess reserves and ultimately lead to a ____ total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves
a. $1,800; $7,500 b. $1,800; $5,400 c. $3,000; $7,500 d. $3,000; $3,000
Suppose that a bank has $500 million in asset X, $400 million in asset Y, and $200 million in asset Z. Each asset has a different risk weight. The risk weight for asset X is 40%, the risk weight for asset Y is 70%, and asset Z has zero risk. The amount of risk-weighted assets for this bank is ____________ million. Assuming that the bank has to hold capital equal to 8% of its risk-weighted assets,
the bank must hold _____________ million in capital. A) $480; $38.4 B) $1,100; $88 C) $1,100; $880 D) $340; $27.2
Refer to the following graph.
If price is currently at B and rises, total revenue will rise.
Answer the following statement true (T) or false (F)