When an external cost exists in the production of a good, firms tend to
A) under-produce the good since society pays these costs.
B) over-produce the good.
C) keep production constant throughout the year.
D) under-allocate resources to the production of the good.
Answer: B
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An unexpected increase in aggregate demand
A) causes the price level to fall and the unemployment rate to rise. B) causes the price level to fall and the unemployment rate to fall. C) causes the price level to rise and the unemployment rate to rise. D) causes the price level to rise and the unemployment rate to fall.
A reserve ratio of 10% means that the deposit expansion multiplier is _________.
Fill in the blank(s) with the appropriate word(s).
Which of the following will cause an upward movement along the aggregate demand curve?
a. An increase in the price level of all goods and services b. A decrease in the price level of all goods and services c. A technological improvement in the country d. An increase in government spending
The moment modern banking was born was when
A. the number of goldsmiths' receipts exceeded the number of gold coins kept in goldsmiths' safes. B. the number of gold coins kept in goldsmiths' safes was equal to the number of goldsmiths' receipts in circulation. C. the number of gold coins in goldsmiths' safes exceeded the number of goldsmiths' receipts in circulation.