The multiple by which the commercial banking system can expand the supply of money is equal to the
A. reciprocal of the federal funds rate.
B. ratio of actual reserves to required reserves.
C. reciprocal of the reserve ratio.
D. ratio of required reserves to actual reserves.
Answer: C
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An increase in the selling price of the tires that Jim produces will increase the demand for Jim's labor
a. True b. False
Suppose the Fed sells $10 million in government securities to a commercial bank. If the required reserve ratio is 0.2, what is the maximum amount by which checkable deposits in the banking system can change?
a. +$10,000,000 b. ?$10,000,000 c. +$50,000,000 d. ?$50,000,000 e. +$20,000,000
Necessary conditions for price discrimination include: a. identical tastes among buyers
b. differences in willingness to pay among customers. c. easy resale. d. both (b) and (c)
The best government policy to reduce poverty is
a. a minimum wage law because the resulting unemployment is small in comparison to the benefits to people it helps. b. an expanded welfare program because people must have an additional "need" such as small children or a disability. c. an in-kind transfer because it ensures that the poor receive what they need most such as food or shelter. d. not obvious. Government programs to reduce poverty have many advantages but also many disadvantages.