Which of the following will cause the money multiplier to become smaller?
A) an increase in high powered money
B) a decrease in the ratio of reserves to checkable deposits
C) an increase in the public's preference for checking deposits as opposed to holding currency
D) a reduction in high powered money
E) none of the above
E
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Explain what is meant by the economic principle of voluntary exchange
What will be an ideal response?
From 2000 to 2014, the dollar depreciated substantially against other currencies. This drop in value most likely benefitted
A) European citizens traveling in the U.S. B) U.S. citizens traveling in Europe. C) U.S. manufacturers importing parts from abroad. D) U.S. citizens purchasing foreign-made automobiles.
The FDIC handles most bank failures by the purchase and assumption method because
A) the existence of uninsured deposits (over $100,000 ) makes runs and panics possible. B) it allows the FDIC to avoid paying off large deposits when a bank fails. C) most banks have become too big for the FDIC to allow them to fail. D) it allows the FDIC to write checks legally to pay all deposits, even those over $100,000.
Which of the following is correct?
a. Unemployment insurance raises structural unemployment because it reduces the job search efforts of the unemployed. b. Most economists are skeptical of the value of unemployment insurance primarily because they believe that it results in a poorer match between workers and jobs. c. Studies show that when the unemployed become ineligible for benefits, the probability of their finding a job rises markedly. d. All of the above are correct.