The multiple by which the commercial banking system can expand the supply of money is equal to the reciprocal of:
A. the MPS.
B. its actual reserves.
C. its excess reserves.
D. the reserve ratio.
D. the reserve ratio.
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To close an expansionary gap, the Fed ________ interest rates which ________ aggregate spending and ________ short-run equilibrium output.
A. raises; decreases; increases B. raises; decreases; decreases C. raises; increases; increases D. reduces; increases; decreases
________ is a flow of earnings per unit of time
A) Income B) Money C) Wealth D) Currency
Which of the following statements is true about the total utility provided by a good?
a. Total utility can never be negative. b. Total utility is maximized when marginal utility is maximized. c. Total utility continues to increase as more of the good is consumed. d. Total utility is maximized when marginal utility is zero (for total utility > 0). e. Total utility is maximized when marginal utility is zero (for total utility < 0).
An inflationary gap exists when consumers and businesses are demanding more output than the economy is capable of producing at full employment
a. True b. False Indicate whether the statement is true or false