If banks cannot lend all of their excess reserves,
a. the potential money multiplier increases
b. the actual money multiplier decreases
c. the potential money multiplier decreases
d. the amount of loans by the bank increases
e. demand deposits decrease
B
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Which one of the following unexpected events ignited the 2009 euro crisis?
A) Accelerating hyperinflation and political upheaval. B) The prospect of a sovereign default by one or more euro zone countries. C) Rising oil prices. D) Revolutions in Switzerland and Belgium. E) A Chinese boycott of European products.
Helen is a 19-year-old single mother of two. She has no car and works at a minimum wage job. She receives some assistance from the government, but every time she earns $1, she loses $1 in government assistance. Helen is caught in the poverty trap, which means that:
a. she is taxed at the higher poverty-line rate. b. making more money does not lead to having more money. c. because she accepts government assistance, she is getting lazier. d. unless she continues to work, her children will go into foster care.
A horizontal line has a slope of 0
a. True b. False Indicate whether the statement is true or false
Which of the following is a plausible explanation for a firm paying above-equilibrium wages to its workers?
a. It increases the probability that a worker who shirks will be caught. b. It discourages workers from shirking out of fear of losing their high-paying job. c. The Condorcet Paradox suggests that paying high wages will result in greater effort by employees. d. By paying a high wage, employers solve this adverse selection problem and motivate the employees to work harder.