Which of the following is not true of the demand deposit multiplier?
a. Its formula is 1/RRR.
b. It represents the change in demand deposits generated by a change in reserves.
c. It represents the change in demand deposits generated by a change in taxes.
d. It is a way to determine the effect on money supply from a given Federal Reserve action.
e. It ignores changes in the behavior of the public and the banks.
C
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The products sold by monopolistically competitive firms
A) are differentiated. B) are homogeneous. C) can be either homogeneous or differentiated. D) are close substitutes of each other.
In most countries, primary and secondary education is the responsibility of the
a. private business sector. b. religious institutions. c. government sector. d. household.
Suppose a bank has $3 million in excess reserves and total reserves of $10 million. A required reserve ratio of 10% is applicable to all deposits at the bank. What is the total amount of deposits at the bank?
a. $70 million b. $300 million c. $40 million d. $10 million e. $30 million
When a monopoly cuts its price to increase its sales, it experiences a gain in revenue due to the