The quantity of reserves that banks must hold against deposits is called
A) the reserve ratio.
B) excess reserves.
C) total reserves.
D) required reserves.
Ans: D) required reserves.
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Black markets only exist in developing nations
Indicate whether the statement is true or false
Production refers to
A) physically producing material goods only. B) any activity carried on by a firm, whether a corporation, partnership, or sole proprietorship. C) any activity that results in the conversion of resources into goods and services that can be consumed. D) any activity that causes a material conversion of manufactured goods.
Which of the following situations will cause the supply of British pounds to rise in the foreign exchange market?
a. The price level in the United States rises faster than the price level in the United Kingdom. b. The real GDP in the United States grows while the real GDP in the United Kingdom remains constant. c. The interest rate in the United Kingdom falls while the interest rate in the United States remains constant. d. The tax rate in the United States rises while the tax rate in the United Kingdom does not change.
Suppose that a town council plans to raise the tax charged on each pack of cigarettes sold by 20 percent in order to raise its tax revenues. An economist points out to the council that the tax increase could possibly lead to a decrease in packs sold of more than 20 percent, and thus ultimately reduce the city's tax revenues. Which of the key concepts in economics is best represented by the economist's observation?
a. looking for unintended effects b. efficiency c. opportunity cost d. decisions made at the margin