Clarity Bank has a money multiplier of 12. If Ayesha deposits $75,000 into her account at Clarity, her money could potentially create ______ in new money.
a. $6,250
b. $75,000
c. $900,000
d. $583,333
c. $900,000
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Which of the following is true? i) A rational choice is made on the margin. ii) Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. iii) Economists try to understand how the economic world works by testing normative statements.
A. Only ii
B. i and ii
C. Only iii
D. i and iii
E. Only i
In 2008 as the recession worsened, suppose discouraged workers were included as part of the unemployment rate. Which of the following would have occurred?
A) The unemployment rate would have increased. B) The unemployment rate would have decreased. C) The labor force participation rate would not have changed. D) The unemployment rate would not have changed. E) The labor force participation rate would have decreased.
Sam Edison obtains a patent on his new invention: trinoculars. In the long run,
a. he can earn only a normal profit b. he may suffer an economic loss and stop producing c. his monopoly power guarantees him a positive economic profit d. he will achieve productive efficiency e. he will achieve allocative efficiency
If the economy is experiencing an inflationary gap, Keynesian economists advocate allowing flexible wages to shift the short-run aggregate supply curve (SRAC) upward and restore full employment
a. True b. False Indicate whether the statement is true or false