Ceteris paribus, if the Fed reduces the reserve requirement, then:
A. Total reserves increase.
B. Total deposits decrease.
C. The lending capacity of the banking system increases.
D. The money multiplier decreases.
C. The lending capacity of the banking system increases.
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The table above shows the total product schedule for Rick's Lawn Service, a yard care company. The total product schedule shows
A) increasing marginal returns when the 6th worker is hired. B) decreasing marginal returns when the 1st worker is hired. C) first increasing and then decreasing marginal returns. D) output first increases then increases. E) only decreasing marginal returns.
Why are elected representatives far more likely to be informed about the issues on which they vote, compared to the typical citizen-voter?
A) A politician loves politics; citizens hate it. B) A politician is more patriotic than citizens. C) A politician is rationally ignorant; citizens are just plain ignorant. D) A politician's vote has a far greater probability of affecting the outcome, compared to a citizen's vote.
Between 1980 and 1990, the national debt
a. decreased from approximately $300 billion to $100 billion b. decreased from approximately $3 trillion to $1 trillion c. as a percent of GDP, decreased d. remained relatively unchanged as a percentage of GDP e. increased from approximately $1 trillion to over $3 trillion
Sara's income is $500, the price of X is $6, and the price of Y is $4. Based on these prices and income, Sara buys 120 units of X and 70 units of Y. Call this combination of X and Y "bundle K." At bundle K, Sara's marginal rate of substitution is 2. Given these prices and income, what is Sara's equilibrium consumption of X? Briefly explain your reasoning.
What will be an ideal response?