Suppose you found $2,000 hidden in your mattress and deposited it in a demand deposit account at your bank. If the reserve requirement was 25 percent, the deposit would directly create ____ in excess reserves and ultimately lead to a ____ total increase in the money supply, if all banks in the system lend out 100 percent of their excess reserves
a. $2,000; $8,000
b. $2,000; $6,000
c. $1,500; $8,000
d. $1,500; $6,000
c
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How would you define exchange control?
A) The government allocates foreign exchange through decree rather than through the market. B) a country NOT pegging its exchange rate C) a country pegging its exchange rate D) a country buying up excess current account so that CA=0 E) a country restricting all foreign exchange
The above figure shows the market for apples. If the government restricts output to no more than 300 pounds, then
A) 300 pounds of apples will be sold at $3. B) 200 pounds of apples will be sold at $3. C) no apples will be sold. D) None of the above.
The more inelastic the schedule, the greater the percentage of the tax that is borne on the other side of the market
a. True b. False
Refer to Table 5.4. If outcomes 1 and 2 are equally likely at Job A, then the standard deviation of payoffs at Job A is
A) $1. B) $10. C) $40. D) $50. E) $60.