Figure 3-23
Refer to . The movement from point A to point B on the graph would be caused by
a.
an increase in price.
b.
a decrease in price.
c.
a decrease in the price of a substitute good.
d.
an increase in income.
b
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Moral hazard can contribute to high bank leverage in all of the following ways EXCEPT
A) having high capital requirements. B) bank managers are compensated in part on providing shareholders with high returns on equity. C) high bank leverage provides shareholders with a potential for a higher return on equity. D) federal deposit insurance has reduced the incentive of depositors to monitor the behavior of bank managers.
The sum of the MPC and the MPS is always:
a. greater than 1. b. less than 1. c. equal to 1. d. equal to zero. e. between 0 and 1.
When the exchange rate is determined by market forces and an economy is experiencing a net inflow of capital, the economy will tend to
a. run a budget deficit. b. run a trade deficit. c. experience an increase in the supply of money. d. experience a reduction in the supply of money.
Other things the same, a country that increases its savings rate will have
a. higher future capital and higher future real GDP per person. b. higher future capital but not higher future real GDP per person. c. higher future real GDP per person but not higher future capital. d. neither higher future capital nor higher future real GDP per person.