What limits an unregulated bank's ability to go on creating money indefinitely?
What will be an ideal response?
Its ability to maintain people's confidence in the continuing value of its liabilities
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Suppose you are very picky about your outdoor BBQ experiences --- and you need exactly 1 cup of lighter fluid for each bag of charcoal you use. If you have either leftover charcoal or leftover lighter fluid, you simply discard it. a. With cups of lighter fluid on the horizontal and bags of charcoal on the vertical axis, illustrate some of your indifference curves. b. Suppose that your favorite charcoal has just gotten better because the producer has infused the charcoal with half a cup of lighter fluid per bag. How does your answer to (a) change? c. How could you change the units in which lighter fluid is measured on the horizontal axis to get your graph from (b) to look the same as you original graph in (a)?
What will be an ideal response?
The aggregate demand curve will shift rightward when there is:
A. a decrease in government spending. B. a decrease in incomes abroad. C. a tax increase. D. the expectation that future consumer income will rise.
Compute the present value of a perpetual bond that pays a monthly cash flow of $1,000 at an annual interest rate of 12 percent.
A. $101,000 B. $100,000 C. $9,333.33 D. $8,333.33
Refer to the information provided in Figure 14.1 below to answer the question(s) that follow.
Figure 14.1Refer to Figure 14.1. Firms form a cartel that maximizes profits. The profits are
A. $0. B. $1,080. C. $1,800. D. indeterminate from this information.