Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only form of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum of
A. $2,000.
B. $8,000.
C. $9,000.
D. $10,000.
$8,000
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The above table shows the distribution of wealth and income for Miseria. What percent of wealth is owned by the poorest forty percent of the population?
A) 0 percent B) 2 percent C) 5 percent D) 10 percent
The crowding-out effect indicates that budget deficits
a. will stimulate aggregate demand and, therefore, exert a strong impact on output and employment. b. will lead to additional borrowing and higher interest rates that will reduce the level of private spending. c. are highly appropriate when the threat of inflation is present. d. are highly appropriate when the threat of recession is present.
The In the News article titled "Men vs. Women: How They Spend" differentiates the spending habits of women and men: "Men spend almost twice as much as women do on electronic equipment … young women spend twice as much money on clothing, personal care items, and their pets." Which determinant of demand is most likely involved?
A. Other goods (availability and prices). B. Income. C. Tastes. D. Expectations.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower