When the legal reserve requirement is changed,
a. the money multiplier is changed but the amount of excess reserves in the banking system is unchanged
b. the money multiplier is unchanged but the amount of excess reserves in the banking system is changed
c. the size of the money multiplier and the amount of excess reserves change in the opposite direction from the legal reserve requirement
d. the size of the money multiplier and the amount of excess reserves change in the same direction as the legal reserve requirement
e. neither the money multiplier nor the amount of excess reserves change.
C
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The slope of the budget line in the graph shown:
A. represents the opportunity cost of the two goods relative to each other.
B. represents the relative marginal utilities from consuming the two goods.
C. measures the total utility the consumer gets from consuming the two goods.
D. is the consumer’s income level.
The PPP theory is most useful in predicting:
A. short-run changes in the exchange rate for a country that mainly produces lightly-traded standardized goods. B. short-run changes in the exchange rate for a country that mainly produces heavily-traded standardized goods. C. long-run changes in the exchange rate for a country that mainly produces heavily-traded standardized goods. D. long-run changes in the exchange rate for a country that mainly produces lightly-traded non-standardized goods.
Refer to the information provided in Figure 26.1 below to answer the question(s) that follow.
 Figure 26.1Refer to Figure 26.1. Between the output levels of $1,000 billion and $1,500 billion, the relationship between the price level and output is
A. positive. B. constant. C. negative. D. indeterminate.
Under the Bretton Woods system,
a. all countries fixed their exchange rate to the price of gold. b. all countries fixed their exchange rate in terms of a quantity of gold. c. all countries fixed their exchange rate to the dollar and the dollar floated. d. the U.S. fixed the dollar to gold and all other countries fixed their exchange rate to the dollar. e. none of the above.