Refer to the information provided in Scenario 25.2 below to answer the question(s) that follow.SCENARIO 25.2: The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up.
Refer to Scenario 25.2. What is the money multiplier in this economy?
A. 10
B. 16.67
C. 20
D. 50
Answer: A
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Before the Great Depression of the 1930s, the majority of government spending took place at the ________ and after the Great Depression the majority of government spending took place at the ________
A) federal level; state level B) federal level; state and local levels C) state and local levels; federal level D) local level; federal level
According to Keynes, if the economy is in a deep recession, an increase in aggregate demand will
A. increase real GDP without putting significant upward pressure on the price level. B. decrease real GDP. C. increase the price level with no effect on real GDP. D. increase both real GDP and the price level.
In the short run, a monopolistically competitive firm can earn
A) positive profits only. B) zero profits only. C) zero or positive profits only. D) zero, positive or negative profits.
The demand and supply curves in the market for gasoline are illustrated in the graph below.
Starting at the equilibrium point, if the government imposes a price ceiling of $10, producer surplus will fall by an amount given by the area ________
A. B + E. B. B + C. C. C. D. A.