When the potential money multiplier is 7, a $3,000 increase in demand deposits could support the creation of ______ new demand deposits
a. $3,000
b. $9,000
c. $15,000
d. $18,000
e. $21,000
D
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Which of the following is NOT a basis for the Taylor-rule guideline for how the Federal Reserve should set its target value for the federal funds rate?
A) the current deviation of the actual inflation rate from the Fed's inflation objective B) the gap between actual real GDP and a measure of potential real GDP C) an estimated long-run real interest rate D) the present deviation of the actual unemployment rate from the Fed's unemployment objective
Are all efficient outcomes also equitable? Explain
What will be an ideal response?
Competitive pricing is efficient because
A) the price that consumers pay reflects the opportunity cost to society of producing the good. B) firms make positive economic profits in long-run equilibrium. C) average revenue equals average cost. D) firms produce above the minimum efficient scale.
Which of the following is not a type of leakage from the circular flow of income?
a. saving. b. imports. c. investment. d. taxes.