A theory is:
a. based only on critical factors or variables. b. a simplified abstraction of the real world.
c. a detailed description of reality. d. a and b.
d
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The monetary policy-making body of the Federal Reserve is the
A) Federal Open Market Committee. B) New York Federal Reserve Bank. C) regional Federal Reserve Banks. D) Board of Governors.
Under purely flexible exchange rates,
A) there is no intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate. B) there is only occasional intervention by the domestic fiscal or monetary authorities to specifically target the nominal exchange rate. C) the domestic fiscal and monetary authorities retain considerable flexibility to prevent short-run variability in the nominal exchange rate. D) the domestic fiscal and monetary authorities retain considerable flexibility to prevent long-run variability in the nominal exchange rate.
If the required reserve ratio is 10 percent, $1,000 cash deposited into a checkable deposit account will generate, assuming willing borrowers, an increase in the money supply of:
a. $900. b. $1,100. c. $9,000. d. $10,000. e. $11,000.
If average costs of production decline with increases in output for a particular large firm in an industry:
a. many small firms will be more efficient than the single large firm in the industry. b. the single large firm will be more efficient than many small firms in the industry. c. product diversification will be necessary for the firm to spread its overhead. d. diseconomies of scale become significant as its output increases. e. its variable cost of production will exceed its fixed costs.