Assuming all excess reserves are loaned out, if the reserve ratio is 25 percent, the money multiplier will be equal to:
A. 0.5.
B. 2.5.
C. 4.
D. 5.
Answer: C
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What happens to the demand for Xbox games if the price of an Xbox falls?
A) The demand for Xboxes decreases because the price of a substitute falls. B) The demand for Xboxes increases because the price of a complement falls. C) The demand for Xboxes decreases because the price of a complement falls. D) The demand for Xboxes remains unchanged.
Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:
a. stay in operation in the short-run. b. earn an economic profit. c. earn an economic profit in the long run. d. shut down.
Which of the following statements is true about Say's law?
a. It states that supply creates its own demand. b. It states that demand creates its own supply. c. It states that total output will always exceed total spending. d. It states that consumption spending is the most volatile component of aggregate expenditures. e. It is a major proposition of the Keynesian model.
According to official statistics in the United States, a family is considered to live in poverty if its money income:
A. and all government transfers are below three times an average family's minimum food budget. B. is below the income earned by 80 percent of all Americans. C. is below the income earned by 90 percent of all Americans. D. is below three times an average family's minimum food budget.