If there were no fractional reserve banking, then:
A. banks would not create money in the economy.
B. banks would not be able to create as much money as they desired.
C. the reserve ratio must be 0 percent.
D. there would be a very small amount of lending using deposits.
Answer: A
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If the price of aluminum used to make bicycles increases, the price of a bicycle rises because of a
A) rightward shift of the demand curve for bicycles. B) rightward shift of the supply curve of bicycles. C) leftward shift of the demand curve for bicycles. D) leftward shift of the supply curve of bicycles.
Hubert's Copy Services is in perfect competition. Hubert currently charges 10 cents per page, which is the going market price. He thinks that he can increase his profit by raising the price. Is it possible? Why or why not?
What will be an ideal response?
Compared to Chile (since 1973), Argentine policy has been
a. more favorable to private enterprise b. more monetarist c. more constant d. more successful in macroeconomic terms e. none of the above
A sunk cost is one that
a. changes as the level of output changes in the short run b. was paid in the past and will not change regardless of later decisions c. should determine the rational course of action in the future d. has the most impact on profit-maximizing decisions e. influences rational decision makers