Seigniorage is defined as the difference between the exchange value of a money and its cost of production
Indicate whether the statement is true or false
TRUE
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If the total amount of demand deposits in the country increases by $12,000 after the Fed purchases $6,000 in bonds, what is the required reserve ratio?
a. 0.4 b. 0.1 c. 0.2 d. 0.5 e. 0.3
When a monopolist is producing the profit-maximizing rate of output, price is greater than the marginal cost of producing the last unit of output
Indicate whether the statement is true or false
If price rises from $2 to $3 and the quantity demanded falls from 100 to 99, price elasticity of demand would be
A. 0.03. B. 0.67. C. 1.23. D. 5.81.
Holding liquidity and default risk constant, an investor earning 6% from a tax-exempt bond who is in a 25% tax bracket would be indifferent between that bond and a taxable bond with a(n):
A. 7.5% yield. B. 6.25% yield. C. 8% yield. D. 4.5% yield.