Banks make additional loans when desired reserves
a) exceed actual reserves, a situation of positive excess reserves.
b) are less than actual reserves, a situation of positive excess reserves.
c) exceed actual reserves, a situation of negative excess reserves.
d) are less than actual reserves, a situation of negative excess reserves.
Answer: b) are less than actual reserves, a situation of positive excess reserves.
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Which of the following is money?
A) credit card B) e-checks C) debit card D) checkable deposit E) checks
Over time, an increase in a nation's stock of physical capital will
a. shift the production possibilities curve inward. b. cause an economy to operate inside its production possibilities curve. c. shift the production possibilities curve outward. d. eliminate the basic economic problem of scarcity.
The view that individuals weigh all available evidence when they formulate their expectations about economic events (including information concerning the probable effects of current and future economic policy) is called:
A. the adaptive expectations hypothesis. B. the permanent income hypothesis. C. the rational expectations hypothesis. D. the Phillips curve.
Inelastic demand implies
A) that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. B) that a one percent increase in price results in a larger than one percent decrease in quantity demanded. C) that a one percent cut in price results in a larger than one percent increase in quantity demanded. D) that a one percent decrease or increase in price induces no change in total revenue.