On a certain date the banking system had $2 billion in excess reserves. The legally required reserve ratio was 12.5 percent. Potentially, if these funds were fully loaned out, the banking system as a whole could increase the money supply by a maximum of:
a. $0.25 billion.
b. $2.5 billion
c. $12.5 billion.
d. $16 billion
d
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If the aggregate price level adjusts slowly over time, then an expansionary monetary policy lowers
A) only the short-term nominal interest rate. B) only the short-term real interest rate. C) both the short-term nominal and real interest rates. D) the short-term nominal, the short-term real, and the long-term real interest rates.
For much of the 1940s, 50s and 60s, macroeconomic policymaking in the U.S. and abroad was dominated by:
a. the ideas advanced in Keynes's General Theory. b. the ideas advanced in Friedman's Monetary History of the U.S. c. the supply-side theories of Arthur Laffer and David Stockman. d. Robert Lucas's theories of business cycles.
Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, the equilibrium quantity in the labor market for computer programmers
a. increased. b. decreased. c. did not change. d. It is not possible to determine the equilibrium quantity.
If the price elasticity of demand for automobiles is 2:
A. a 10 percent increase in price would result in a 10 percent decrease in quantity demanded. B. a 10 percent increase in price would result in a 20 percent increase in quantity demanded. C. a 10 percent decrease in price would result in a 20 percent decrease in quantity demanded. D. a 10 percent decrease in price would result in a 20 percent increase in quantity demanded.