Suppose that you take $500 from under your mattress and deposit it into your checking account. Assuming a required reserve ratio of 10%, what is the largest amount by which the money supply can increase as a result of your action
What will be an ideal response?
4,500
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What is the rationale behind empiricism in economic analysis?
What will be an ideal response?
Experience with patents in the pharmaceutical industry shows that when patents on drugs expire
A) prices remain high without patent protection because of a lack of competition. Firms that are not granted patents cannot compete with firms that are granted patents. B) other firms are free to produce chemically identical drugs. Competition reduces the profits that had been earned by the firms that received patents. C) most patients will continue to buy the drugs from the same firms because their doctors recommend they buy brand-name drugs. D) firms will find ways to obtain additional patent protection—often by making cosmetic changes in drugs that were patented—so that they can continue charging high prices.
Which of the following is an exogenous variable in the Three-Sector-Model?
a. Real GDP b. GDP price index c. Required reserve ratio d. Quantity of real credit per time period e. Quantity of currency per time period
According to the Fisher effect, if the central bank raises the rate of money supply growth, what happens to the nominal and the real interest rate?