Banks create money by keeping a small percentage of deposits in reserves and __________ the remaining funds, charging interest.
a. lending
b. spending
c. saving
d. investing
a. lending
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Aggregate demand:
A. Refers to the collective behavior of all buyers. B. Reflects the total quantity of output produced. C. Increases when the price level increases. D. Is influenced directly by aggregate supply.
Which of the following describes a situation in which demand must be elastic?
A. Total revenue increases by 15 percent when the price of corn dogs rises by 15 percent. B. Total revenue increases by less than 15 percent when the price of corn dogs rises by 15 percent. C. Total revenue decreases by more than 15 percent when the price of corn dogs rises by 15 percent. D. Total revenue increases by $15 when the price of corn dogs rises by $15.
Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, they are able to buy inputs in bulk, resulting in lower input prices. It is likely that continued growth will result in:
A. economies of scale. B. Gigantic Company achieving the minimum efficient scale of production. C. diseconomies of scale. D. increasing marginal returns.
The theory that there are no predictable trends in securities prices that can be used to "get rich quick" is the
A. inefficient market hypothesis. B. dartboard theory. C. Wall Street theory. D. random walk theory.