Suppose that from a new checkable deposit, First National Bank holds eight million dollars on deposit with the Federal Reserve, one million dollars in required reserves, and faces a required reserve ratio of ten percent
Given this information, we can say First National Bank has ________ million dollars in excess reserves. A) two
B) eight
C) nine
D) ten
C
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If ________ GDP exceeds ________ GDP, employment exceeds its full-employment level and the unemployment rate is ________ the natural unemployment rate
A) real; nominal; below B) real; potential; below C) real; potential; above D) nominal; potential; above E) nominal; potential; below
In the United States there were legal reserve requirements on time and savings deposits during most of the post-World War II period. Therefore, the money multiplier for the M1 definition was
a. smaller when time and saving deposits increased. b. smaller when time and saving deposits were assumed to be fixed. c. larger when time and saving deposits increased. d. smaller when time and saving deposits decreased.
Why is the fear of expropriation an obstacle to economic growth?
a. Without research and development, no technological advances can be made. b. Large government spending causes negative externalities. c. Powerful special interest groups have too much control. d. No foreign investment comes to the country, because of the lack of guarantees. e. The fear of expropriation causes too many resources to be devoted to military spending which is a highly unproductive sector.
In the ultimatum game, when the allocator and the recipient care about fairness, how is the distribution of $20.00 affected?
a. Allocators receive everything, and recipients receive nothing. b. Recipients usually reject offers of less than a 10 percent share. c. Allocators usually offer recipients a very small share. d. Allocators and recipients always end up sharing the $20.00 equally.