In a fractional reserve economy where the required reserve ratio is 10%, must it be the case that an initial deposit of $100 increases the total money supply by $1,000? Explain
No, this is not necessarily the case.
It is true the total money supply can increase a maximum of $1,000 . In general, there are two reasons the actual impact will be less than the maximum $1,000.
1) Banks often choose to hold reserves in excess of required reserve.
2) Rather than keep all wealth in the form of deposits at banks, people choose to hold currency.
These two factors cause the actual money creation in the banking system to be less than the maximum possible.
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Economic growth depends on many factors including adherence to the rule of _____.
a. saving b. perpetuity c. law d. citizenship
Structural unemployment arises when
a. marginal productivity of labor becomes zero. b. there is a cyclical change in the economy. c. jobs are eliminated by changes in the economy. d. people change their jobs.
What do we mean when we say that some technological knowledge is not proprietary?
Using Figure 1.7, you can tell that 
A. the technology does not exist to produce 10 units of soda and 1 units of pizza. B. there is increasing opportunity cost. C. there is unemployment. D. the technology does not exist to produce 5 units of soda and 3 units of pizza.