The Paris First National Bank now has $1,000 in demand deposits. By making an $800 loan to Matt Taylor, an aspiring entrepreneur, the bank now has
a. $0 in demand deposits
b. $200 in demand deposits
c. $800 in demand deposits
d. $1,000 in demand deposits
e. $1,800 in demand deposits
E
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We expect the price elasticity of supply to be
A) negative. B) positive. C) between -1 and +1. D) zero.
What are signals? How do profits function as signals?
What will be an ideal response?
Pigovian taxes are used to counterbalance:
A. negative externalities. B. positive externalities. C. network externalities. D. They could be used to counteract any of these.
Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to expansionary monetary policy?
a. A higher general level of prices but no change in real output b. A higher general level of prices and an expansion in real output c. No change in the general level of prices and a reduction in real output d. No change in either the general level of prices or real output