If the desired reserve/deposit ratio equals 0.10, then every dollar of currency in bank reserves supports ________ of deposits and the money supply, while every dollar of currency held by the public contributes ________ to the money supply.
A. $10; $1
B. $1; $10
C. $0.10; $1
D. $1; $0.10
Answer: A
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Figure 5-14
Martha initially buys the combination of pens and pencils shown as A in Figure 5-14. After the prices of both goods change, she buys combination B. It must be true that
A. Martha prefers A to B. B. Martha prefers B to A. C. Martha is indifferent between A and B. D. Martha’s preferences between A and B cannot be determined from the information given.
The distribution of wealth is skewed in part because people with high wealth
A) save very little. B) tend to marry people with similar wealth. C) have very little skills. D) do not earn much more than those with low incomes.
Citizens can consume more of everything in a(n)
A. open economy. B. economy with many citizens. C. autarky. D. closed economy.
Firms react to negative inventory investment by increasing output.
Answer the following statement true (T) or false (F)