In a system of 100-percent-reserve banking,
a. banks do not make loans.
b. currency is the only form of money.
c. deposits are banks' only assets.
d. All of the above are correct.
a
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Which of the following applies to the "value of money"?
i. It is the inverse of the price level. ii. The value of money falls during economic expansions. iii. It is the quantity of goods and services that a unit of money will buy. A) iii only B) i and ii C) i, ii and iii D) ii and iii E) i and iii
If a typical monopolistically competitive firm is incurring short-run losses, then
A) other more competitive firms will enter the market. B) as some firms leave, the remaining firms will experience an increase in the demand for their products. C) as some firms leave, the demand for the products of the remaining firms will become more elastic. D) the industry will eventually cease to exist.
Refer to the information provided in Figure 31.2 below to answer the question(s) that follow.
Figure 31.2Refer to Figure 31.2. Suboptimal production occurs when the economy is at Point
A. A. B. B. C. C. D. D.
Refer to the graph below. Assume that the economy is initially in equilibrium at the intersection of AD1 and AS1. Suppose that there is economic growth which shifts AS1 to AS2. Mainstream economists would suggest that the application of a monetary rule to keep prices constant might produce demand-pull inflation because the investment spending might:
A. Increase and cause the aggregate demand curve to shift from AD1 to AD4
B. Decrease and cause the investment demand curve to shift from AD1 to AD4
C. Increase and cause the aggregate demand curve to shift from AD1 to AD2
D. Decrease and cause the investment demand curve to shift from AD1 to AD2