Jeff Kaufman decides to bank with Paris First National Bank (PFN). He opens a checking account by depositing $1,000 . According to the PFN balance sheet, after this initial $1,000 demand deposit, there are $1,000 in
a. reserves and $1,000 in demand deposits
b. liabilities and $2,000 in demand deposits
c. demand deposits and $0 in assets
d. assets and $0 in liabilities
e. reserves and $0 in liabilities
A
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The velocity of circulation is
A) the relationship between income and spending. B) the relationship between increases in income and investment. C) the ratio of currency to demand deposits. D) the average number of times per year a dollar is spent on goods and services in GDP.
If some coffee drinkers continue to buy Maxwell House coffee even when Folger's coffee is on sale and cheaper, it may be a result of
a. irrational consumer behavior b. a high cross elasticity c. brand loyalty d. Maxwell House being a monopoly e. elastic demand
A monopoly incurs a marginal cost of $1 for each unit produced. If the price elasticity of demand equals -2.0, the monopoly maximizes profit by charging a price of
A) $1.00. B) $1.50. C) $2.00. D) $3.00.
If ________ bargaining to resolve an externality is to result in an efficient outcome, the initial assignment of rights must be clear to ________ parties.
A. private; both B. public; at least one C. private; at least one D. public; only government-sponsored