A change in the reserve requirement causes a change in all of the following except
A. The money multiplier.
B. Excess reserves.
C. The lending capacity of the banking system.
D. Pretax income.
Answer: D
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A plausible elasticity of investment with respect to the user cost is
A. 0.52 B. 1.62 C. 0.40 D. 2.22
A result of a positive externality in the production of a good is that
A) the price system will over-allocate resources to the production of that good or service. B) the price system will under-allocate resources to the production of that good or service. C) the market supply will be too high. D) the market demand will be too high.
Which of the following statements is TRUE if your money income stays the same but the price of one good that you are buying goes up?
A) Your effective purchasing power falls. B) Your nominal income has been decreased. C) You will have to reduce the quantities you purchase of all goods. D) Your real income has increased.
Why do major-league baseball players get paid more than minor-league players?
a. Major-league players are better athletes. b. The higher wage reflects a compensating differential. c. Playing in the major leagues in more pleasant then playing in the minor leagues. d. The higher wage is often due to educational discrepancies.