A higher reserve requirement
A. Further limits deposit creation.
B. Increases the ability of banks to make loans.
C. Increases the borrowing capability of borrowers.
D. Lowers the interest rate.
Answer: A
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Which of the following is true of Simple Keynesian model? a. Price level increases with an increase in aggregate demand
b. The aggregate supply curve is assumed to be perfectly inelastic. c. The aggregate demand curve is assumed to be perfectly elastic. d. Price level is solely determined by the aggregate demand curve. e. Changes in aggregate demand determines equilibrium real GDP.
Economists generally agree that in reducing poverty, policies should be sought that do the
a. greatest good for total production. b. least harm to work incentives. c. most good for the poor. d. least harm to equality of income.
Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine.
The socially optimal quantity of the vaccine is ________ doses per day.
A. 75 B. 100 C. 125 D. 50
Eduardo is a 19-year-old male who drives a sports car. He is a very safe, highly skilled driver, and he has never had an accident. He is angry when he learns his auto insurance premium is more than double that of his older sister, who is a terrible driver. Why are their rates so different?
a. Insurance companies want good drivers to leave the market. b. Insurance companies base premiums on risk categories rather than individual actions. c. Insurance companies want to keep poor drivers in the market. d. Insurance companies try to provide coverage to everyone equally regardless of skill.