Commercial banks create new money:
A. by issuing checks.
B. when they increase their desired reserve/deposit ratio.
C. when they buy government bonds from the Federal Reserve.
D. through multiple rounds of lending.
Answer: D
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National income accountants measure the value of final goods and services with
A) market prices. B) fair prices. C) objective values. D) best-guess estimates as to what things are really worth.
All games involve which of the following?
A. Multiple players B. Strategies C. Payoffs D. All games involve all of these things.
The liquidity effect is the
A) decrease in the interest rate due to an increase in the supply of loanable funds. B) increase in the interest rate due to an increase in national income. C) increase in the interest rate due to a higher expected inflation rate. D) increase in the interest rate due to an increase in the price level.
Suppose Sam buys a good for $100 at a yard sale. If consumer surplus from the sale is $75, Sam would have been willing to pay:
A. $100. B. $175. C. $25. D. equal to the deadweight loss.