The more excess reserves banks choose to keep,
A) the larger the deposit multiplier. B) the smaller the deposit multiplier.
C) the lower the required reserve ratio. D) the higher the required reserve ratio.
B
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The firm depicted in Figure 8.1 is:
A) earning a positive economic profit. B) incurring an economic loss and should shut down. C) incurring an economic loss but it should continue to operate in the short run so long as price exceeds average variable costs. D) earning a zero economic profit.
In the 1800s, people in mining towns in the West often paid for goods with gold nuggets or gold dust. What was the function of gold?
(A) It was used as representative money. (B) It was used as fiat money. (C) It was used as part of a barter system. (D) It was used as a currency.
Suppose the world price of automobiles is $20,000 and automobile manufacturers in Country A use $10,000 worth of imported inputs and no domestic inputs. What is the effective rate of protection for the automobile industry in Country A, if there is a tariff of 25 percent on imported automobiles and a tariff of 50 percent on imported inputs used in this industry?
What will be an ideal response?
The single most important factor in the 1992 crisis of the EMS was
A) ratification of the Single European Act. B) the near failure of the Maastricht Treaty. C) German reunification efforts. D) the outbreak of war in the former Yugoslavia.