Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is greater than one, an increase in the currency-deposit ratio causes the M1 money multiplier to ________ and the money supply to ________
A) decrease; increase
B) increase; increase
C) decrease; decrease
D) increase; decrease
B
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Lizzie's budget line is shown in the figure above. If the price of a cookie falls, the budget line
A) shifts rightward and its slope does not change. B) shifts leftward and its slope does not change. C) becomes flatter. D) becomes steeper.
Scarcity is a concept that implies that choices must be made
a. True b. False Indicate whether the statement is true or false
Each of the following is an example of the price mechanism at work, except when
A. wage and price controls were used during World War II to control inflation. B. consumers curtailed driving their cars when the price of gasoline increased dramatically in 2005. C. American farmers during World War I expanded production on previously unused land in response to higher crop prices. D. factories of gas-guzzling automobiles shut down when the price of gasoline triples in less than three months.
Refer to the following table. At this level of consumption of goods A and B, the consumer: Good AGood BMarginal utility100500Price$20$50
A. could increase total satisfaction for a given expenditure by increasing the consumption of B and decreasing that of A. B. could increase total satisfaction for a given expenditure by increasing the consumption of A and decreasing that of B. C. is maximizing satisfaction for the given expenditure. D. should consume only A.