If the government requires banks to keep 100 percent of their deposits on reserve, a $1,000 deposit in a checking account would lead to a $100,000 increase in the money supply
a. True
b. False
Indicate whether the statement is true or false
False
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The purpose of the restrictive debt covenant that prohibits borrowers from entering into certain types of leases is to
A. ensure a cash shortage does not cause an inability to meet current obligations. B. prevent liquidation of assets through large salary increases of key employees. C. protect the lender by controlling the risk and marketability of the borrower's security investments alternatives. D. limit the amount of fixed-payment obligations.
Refer to Table 11.1. What is the value of personal consumption expenditures?
A) $3,000. B) $1,000. C) $4,350. D) $2,350.
Negative supply shocks confront the Fed with a dilemma because
a. full employment is no longer possible b. the costs of fulfilling one objective are paid in terms of failure to meet the other c. inflation cannot be prevented considering the reduced supply d. all policy choices are equally undesirable e. such shocks are entirely unpredictable
Which of the following statements best expresses a firm's profit-maximizing decision rule?
a. If marginal revenue is greater than marginal cost, the firm should increase its output. b. If marginal revenue is less than marginal cost, the firm should shut down in the short run. c. If marginal revenue equals marginal cost, the firm should produce exactly one more unit of output. d. All of the above are correct.