The required reserve ratio is 10 percent, but banks actually keep 20 percent on reserve. The actual money multiplier will be
A. 10
B. 9
C. 5
D. 2
E. 1
Answer: C
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An increase in the price of metal raises the cost of manufacturing dishwashers. As a result, the market changes to a new equilibrium because of
a. a surplus of dishwashers. b. an increase in the demand for dishwashers. c. a leftward shift in the demand curve for dishwashers. d. a leftward shift in the supply curve for dishwashers.
The value of the marginal propensity to consume is
a) between 0 and 1 b) between 1 and 10 c) between -1 and 1 d) between 1% and 100%
Jon is consuming X and Y so that he is spending his entire income and MUx/Px = 8 and MUy/Py = 4. To maximize utility, he should consume
A. the same amount of X and Y since he is already maximizing utility. B. less X and more Y. C. less of both X and Y. D. more X and less Y.
Graphically short-run equilibrium occurs at the intersection of the aggregate demand curve and the:
A. long-run aggregate supply line. B. the aggregate expenditure line. C. short-run aggregate supply line and the long-run aggregate supply line D. short-run aggregate supply line.