Which of the following represents the lending capacity of an individual (non-monopoly) bank?
A. (Total reserves - required reserves) × multiplier.
B. Total reserves - required reserves.
C. 1 ÷ (required reserve ratio).
D. Required reserve ratio × total deposits.
Answer: B
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In neoclassical growth theory, technological progress is the key to continuous growth in labor productivity
Indicate whether the statement is true or false
Which of the following equations represents consumer equilibrium?
a. MU1/P1 = MU2/P2 b. MU1/P2 = MU2/P1 c. P1/MU1 = P2/MU2 d. P1/MU2 = P2/MU1
If the objective of economic policy is to decrease the amount of pollution by an industry in the long run, the
A. most effective policy action would be a subsidy to firms for the reduction of emissions. B. most effective policy action would be a tax on polluting firms. C. appropriate course of action for government is to do nothing. D. appropriate course of action for government is to increase R&D outlays to develop technology to remove the emissions from the environment.
After a negative demand shock, what are the expected long-run adjustments?
a. Wages rise, price level rises, and output falls back to potential b. Wages fall, price level rises, and output falls back to potential c. Wages fall, price level falls, and output increases back to potential d. Wages fall, price level rises, and output increases back to potential e. Wages rise, price level falls, and output increases back to potential