Assume that banks become less conservative in their lending policies and start holding no excess reserves. Compared to a situation in which banks are holding excess reserves, the size of the money supply will be
A. the same.
B. smaller.
C. zero.
D. larger.
Answer: D
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Pursuing comparative advantage means
A) adding up the plusses and minuses after a transaction. B) doing it to the other person first. C) making equal, fair exchanges for equally valued goods or services. D) sacrificing something less valuable for the sake of something more valuable. E) seeking relative status rather than absolute welfare.
Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 30,000 units
A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low. B) producers should raise the price to $3 in order to sell the quantity demanded of 30,000. C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently high. D) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
In the above table, if the marginal factor cost is $48, how many workers would be hired?
A) 3 B) 4 C) 5 D) 6
Movie theatres offer senior discounts because
a. Seniors have a more elastic demand for movie tickets b. Seniors have lower incomes c. Seniors have a lower opportunity cost of time d. All of the above