Which of the following is an example of a durable good?
(A) A box of cereal
(B) A pack of baseball cards
(C) A used car
(D) A paperback book
Ans: (C) A used car
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Why does the money multiplier measure potential money creation rather than guaranteed money creation?
a. Borrowers may spend all the money they acquire through a loan. b. The money is not real until it is deposited or spent. c. Some banks may choose to keep some of their new deposits in their reserves. d. Borrowers may deposit their loan money into checkable rather than demand deposits.
The market
A. Always provides a better mix of goods and services without government intervention than it does with government intervention. B. May not produce the optimal mix of output, which is known as government failure. C. On its own may not always provide the optimal mix of goods and services. D. Always provides the optimal mix of goods and services.
A bank run is
A. the transfer of funds from one bank to another. B. a situation when a bank borrows from the Fed's discount window. C. a situation in which a bank borrows at the Federal funds rate. D. a large-scale, panicky withdrawal of deposits from a bank.
The figure above shows the market for milk. If 100 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________
A) maximum; $2.50 B) minimum; $3.00 C) maximum; $4.00 D) minimum; $4.00