If the money multiplier is approximated to be 2, then the reserve ratio must be:
A. 5 percent.
B. 50 percent.
C. 2 percent.
D. 20 percent.
Answer: B
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According to the principle of comparative advantage, if a rich country trades with a poor country, then
A) the rich country will benefit and the poor country will lose. B) the rich country will lose and the poor country will benefit. C) both countries will benefit. D) neither of the countries will benefit.
Suppose that real GDP for 2015 was $10,000 billion and real GDP for 2016 was $9,500 billion. What is the rate of growth of real GDP between 2015 and 2016?
A) -10% B) -5% C) -2% D) -1%
If workers and firms expect that inflation will be 5 percent next year, and real wages are not changing over time, by how much will nominal wages increase?
A) less than 5 percent B) more than 5 percent C) 5 percent D) depends on actual inflation for next year
Economic developments after the Civil War (1861–1865) in the South include all of the following except
(a) A decline in cotton prices with the result that poverty associated with cotton became a fixed feature of the South (b) The relatively widespread land ownership among the freed slaves (c) The widespread adoption of the sharecropping system (d) The widespread debt peonage for the freed slaves