You have $1,000 in your checking account at Generous Savings and Loan (GSL). GSL holds $300 of your money in reserve and makes a $700 student loan to Wilma, who promises to repay the loan with interest. Wilma now has an additional $700 in her checking account. By how much has the money supply M1 increased?
a. $2,000
b. $1,700
c. $1,000
d. $700
d
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Which type of business is the most difficult to set up?
A) corporation B) sole proprietorship C) partnership D) There is no difference in the difficulty of establishment.
The debt-GDP ratio
A) fell sharply after 1997 due to a high output ratio and higher income tax rates. B) rose from 1981-1992 due to large budget deficits. C) began to decline in 1993. D) all of the above.
The problem of asymmetric information that brings about a general decline in product quality in an industry is
A) a market failure. B) the result of government regulation. C) creative response. D) the lemons problem.
Use the following graph, which shows a change in the demand for pounds from D to D', to answer the next question.
Under a system of flexible exchange rates, the ________.
A. the payment deficit will cause changes in domestic price and income levels, shifting demand to the left, shifting supply to the right, and reestablishing the original exchange rate B. the price of a pound will increase to $3 C. the shortage equal to b?a would be met using international monetary reserves D. the price of a dollar will increase to 3 pounds