A market failure arises when an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event
Indicate whether the statement is true or false
FALSE
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If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is
A) 2.5. B) 1.67. C) 2.0. D) 0.601.
If supply increases, sellers will ______ price, ______ quantity demanded until quantity supplied and quantity demanded are equal.
a. increase; decreasing b. reduce; increasing c. increase; increasing d. reduce;, decreasing
As with fiscal policy, monetary policy is also affected by the ________, _________ and ________ timing lags.
Fill in the blank(s) with the appropriate word(s).
Suppose you are a manager of a factory. You purchase five (5) new machines at one million dollars each. If you can resell two of the machines for $500,000 and three of the machines for $200,000, what are the sunk costs of purchasing the machines?
A. $1.6 million B. $3.4 million C. $5 million D. $500,000