The deposit multiplier is the inverse of
A) legal reserves.
B) excess reserves.
C) checkable deposits.
D) the required reserve ratio.
Ans: D) the required reserve ratio.
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Adam got a job in a multinational company. He was told during the orientation session that he will not be terminated for poor performance during the first six months of his work
Adam immediately decided to put minimum effort into the job during these months. His behavior is an example of ________. A) a positive externality B) moral hazard C) the prisoners dilemma D) the free-rider problem
Using the CPI to compensate workers for inflation is appropriate because, in the face of a change in relative prices, people should be allowed to purchase the same bundle as they did before the price changes
Indicate whether the statement is true or false
An outward shift of the production possibilities frontier
a. reflects economic stability b. reflects economic growth c. reflects economic decline d. does not relate to the state of the economy e. is always a parallel shift
Some studies find that trade in the Eurozone has risen substantially, but compared with the control group of nations that stayed out, Baldwin finds the effect is:
A) larger (25%) because prices have fallen and trade has increased by much more than the control group. B) just about the same because the control group is very similar to nations in the Eurozone. C) somewhat larger (9%) because there has been no measurable price decline within the union or evidence of trade diversion. D) much smaller (-2%) because trade within the union has been lackluster, whereas trade with the control group has increased dramatically.