During the 1990s, the money multipliers for M1 and M2:
A. increased dramatically as the economy grew.
B. remained fairly constant even though the economy grew.
C. decreased.
D. the M1 multiplier decreased while the M2 multiplier increased dramatically.
Answer: C
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Markets can be missing:
A. because public policy prevents the market from existing. B. when the production of a particular good is banned. C. because of a lack of accurate information between potential buyers and sellers. D. All of these are true.
Matt has $2000 saved for a trip at Spring Break. Over Christmas break he decides to spend $400 of it on gifts instead of putting the gifts on his credit card, thus avoiding interest charges. He gradually replaces it in his savings account over the next two months. An economist would say this behavior is:
A. rational. B. irrational. C. utility minimizing. D. not observable.
Examples of market failure include lack of competition, externalities, public goods, and income inequality
a. True b. False Indicate whether the statement is true or false
The legal reserve requirement that banks must adhere to is set by
a. Congress b. the FDIC c. the Treasury Department d. the banking system e. the Federal Reserve