If original excess reserves are $10 million, and if the potential change in demand deposits is $153 million, then the demand deposit expansion multiplier is
A) 1.53.
B) 0.65.
C) 10.0.
D) 0.07.
B
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Which of the following does NOT affect the long-run aggregate supply curve?
A) technology B) endowments of resources C) price level D) production possibilities curve
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
When the Federal Reserve acts as a lender of last resort, it is making sure that banks have the money they need to continue to operate.
Answer the following statement true (T) or false (F)
Which of the following statements about cost functions is true?
a. Variable costs will always increase in direct proportion to the quantity of output produced. b. The less capital equipment employed in the production process relative to labor and other inputs, the longer will be the period of time required to increase significantly the scale of operation. c. The shape of the firm's long-run cost function is important in decisions to expand the scale of operations. d. none of the above