In a fractional-reserve banking system the reserve/deposit ratio equals:
A. 100 percent.
B. more than 100 percent.
C. less than 100 percent.
D. currency held by the public divided by deposits.
Answer: C
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Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Industrio ($/day) $350$400$500$700$1,000 Cost to Capitalista
($/day) $225$250$290$400 $600Given that both firms are currently using process A, the cost of requiring the firms to reduce pollution by 25 percent is ________ per day. A. $790 B. $375 C. $215 D. $75
One aspect of bank accounting is that many liabilities of banks are
A. assets of other persons and businesses in the economy. B. also liabilities of other persons and businesses in the economy. C. not matched by liabilities of most other banks. D. not actually owed to any other person or business in the economy.
Identify the correct statement about changes in money supply.
a. A decrease in money supply causes interest rates to fall b. A decrease in money supply causes investment spending to increase. c. A decrease in money supply causes gross domestic product to increase. d. A decrease in money supply causes investment spending to decrease. e. A decrease in money supply causes aggregate expenditure to increase.
If a country wanted to maximize the value of its output, each job should be carried out by the person who: a. has the highest opportunity cost
b. has a comparative advantage in that activity. c. can complete the particular job most rapidly. d. enjoys that job the least.