The demand for reserves will increase at lower levels of GDP
a. True
b. False
Indicate whether the statement is true or false
False
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The concept that shows the relationship among GDP, the money stock, and the velocity of circulation of money is called the
A. law of diminishing marginal utility. B. equation of exchange. C. law of demand. D. law of diminishing returns.
Which of the following is true? a. A majority of U.S. money, whether M1 or M2, is in the form of legal tender
b. If a bank lends out its excess reserves of $90,000, at the time the loan is made, the money supply will increase by $90,000. c. Reserve requirements exist primarily to eliminate bank runs. d. When there are two forms of money available, people prefer to spend the form of money that is more valuable.
Suppose Luke values a scoop of Italian gelato at $4 . Leia values a scoop of Italian gelato at $6 . The pre-tax price of a scoop of Italian gelato is $2 . The government imposes a "fat tax" of $3 on each scoop of Italian gelato, and the price rises to $5 . The deadweight loss from the tax is
a. $4, and the deadweight loss comes from both Luke and Leia. b. $4, and the deadweight loss comes only from Luke because he does not buy gelato after the tax. c. $2, and the deadweight loss comes from both Luke and Leia. d. $2, and the deadweight loss comes only from Luke because he does not buy gelato after the tax.
Pension funds resemble insurance companies by:
A. becoming better investments the longer you live. B. spreading risk. C. accepting deposits. D. pooling the savings of only large investors.