Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its excess reserve balance will be:
A. $0.
B. $90.
C. $100.
D. $900.
Answer: D
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Which of the following events would lead to an increase in the marginal product of labor for every quantity of labor?
A) An increase in the real wage B) A decrease in the real wage C) A favorable supply shock such as a fall in the price of oil D) An adverse supply shock, such as a reduced supply of raw materials
Which of these government financing methods is generally the least inflationary?
A) Printing currency B) Borrowing from the banking system C) Borrowing from the central bank D) Borrowing from the non-bank public
An externality occurs when: a. people other than those making the demand and supply decisions share the benefits or the costs of an activity. b. only the people making the demand and supply decisions share the benefits or the costs of an activity
c. private costs of production equal the full social costs associated with production of a good. d. private costs of production are ignored.
Rising prices help control the process of resource depletion by
a. discouraging consumption and waste. b. stimulating more efficient use of the depletable resource. c. encouraging resource-saving innovation. d. doing all of the above.