Liquidity refers to the ability of an asset to hold its value in periods of inflation
a. True
b. False
Indicate whether the statement is true or false
False
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Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 40%, and the excess reserve ratio = 0, a decrease in the required reserve ratio to 5% causes the M1 money multiplier to ________, everything else held constant
A) increase from 2.8 to 3.11 B) decrease from 3.11 to 2.8 C) increase from 2 to 2.22 D) decrease from 2.22 to 2
According to A.P. Lerner, splitting income equally among individuals was most appropriate for maximizing combined satisfaction
Indicate whether the statement is true or false
Domingo is a contestant on a trivia quiz show. For every state capital he can correctly identify, he will win $1,000 . However, before identifying any capitals, he must decide how many he thinks he can correctly identify. If he cannot identify as many as he has wagered, Domingo will not win any money. Suppose Domingo says that he can correctly identify 42 state capitals for a potential payoff of
$42,000 . According to studies of human decision-making, what is most likely to happen? a. Domingo will be able to identify 42 state capitals and he will win $42,000. b. Domingo will be able to identify fewer than 42 state capitals and will not win any money. c. Domingo will not be able to identify any state capitals and will not win any money. d. Domingo will choose to save all of the money he wins on the quiz show for his retirement.
Deflation:
a. under the current trends will cause consumers' purchasing power to shrink. b. has been persistent in the U.S. economy since the Great Depression. c. was prevalent during the oil shocks of the 1970s. d. none of these choices.