When the receipts given by goldsmiths to depositors were used to make purchases,
A. the gold standard was created.
B. existing banking laws were violated.
C. the receipts became in effect paper money.
D. a fractional reserve banking system was created.
C. the receipts became in effect paper money.
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To appreciate the U.S. dollar against the Mexican peso, in the foreign exchange market the Fed could ________ dollars and ________ pesos
A) buy; buy B) sell; sell C) sell; buy D) buy; sell E) None of the above answers is correct because the Fed cannot affect the U.S. exchange rate.
How will an increase in physical capital affect labor productivity, labor demand, and potential GDP?
What will be an ideal response?
Which of the following statements best describes productive efficiency?
a. Productive efficiency occurs when as additional increments of resources are added to produce a good or service, the marginal benefit from those additional increments decline. b. Productive efficiency occurs when it is impossible to produce more of one good (or service) without decreasing the quantity produced of another good (or service). c. Productive efficiency occurs when a country can produce a good at a lower cost in terms of other goods or when a country has a lower opportunity cost of production. d. Productive efficiency occurs when the mix of goods being produced represents the mix that society most desires.
Think of the speculative motive for holding money: As the interest rate decreases from 10 percent to 5 percent, the quantity of money people will hold
a. decreases by some quantity, but not necessarily by 50 percent b. increases by some quantity, but not necessarily doubles c. remains unchanged d. doubles e. falls by 50 percent