Suppose that in a country people gain more confidence in the banking system and so hold relatively less currency and more deposits. As a result, bank reserves will
a. decrease and the money supply will eventually decrease.
b. decrease and the money supply will eventually increase.
c. increase and the money supply will eventually decrease.
d. increase and the money supply will eventually increase.
d
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What is the relationship between actual and potential real GDP?
What will be an ideal response?
When a perfectly competitive, well-functioning market is not in equilibrium:
A. total surplus is not maximized. B. there are no exchanges that can make some better off without someone becoming worse off. C. the market is efficient. D. All of these are true.
Frictional unemployment refers to unemployment that is a result of: a. a mismatch of skills
b. being out of work 27 weeks or longer. c. job search. d. seasonal decreases in demand for labor. e. a recession in the economy.
The economic system that is generally considered to be the most efficient at answering the What to produce and the How to produce questions is the:
a. market economy. b. command economy c. soviet economy. d. traditional economy.