Which of the following has been the most likely effect of the Fed's credit policy?
A. The scope of asymmetric information problems in the banking industry has reduced.
B. The money multiplier and the link between the money supply and the economy have become unstable.
C. The federal funds rate and the discount rate have dropped to negative levels.
D. Banks and other financial institutions have taken more time to recover from the 2008-2009 financial meltdown.
Answer: B
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The more excess reserves banks choose to keep
A) the lower the required reserve ratio. B) the smaller the deposit multiplier. C) the larger the deposit multiplier. D) the higher the required reserve ratio.
The theory of expected utility theory
A) predicts all actions involving uncertainty. B) predicts no actions involving uncertainty. C) predicts some, but not all, actions involving uncertainty. D) predicts only one in three actions involving uncertainty.
Which of the following is a root cause behind competition inherent in every society?
a. Unlimited wants of the people b. People's desire to acquire goods and services for free c. Scarcity of goods and services d. Genetic makeup of people
If the price of inputs falls and the level of consumer indebtedness rises:
a. Aggregate demand rises, and aggregate supply falls. b. Aggregate demand rises, but aggregate supply does not change. c. Aggregate demand falls, and aggregate supply rises. d. Aggregate demand and aggregate supply rise. e. Aggregate demand and aggregate supply fall.