Suppose the currency drain ratio is 33.33 percent and the desired reserve ratio is 10 percent. The money multiplier equals
A) 3.00. B) 3.08. C) 2.50. D) 6.67. E) 4.27.
B
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Prior to the time of John Maynard Keynes, most economists stressed that
a. low levels of aggregate demand would lead to prolonged periods of unemployment. b. market economies were inherently unstable because of fluctuating aggregate demand. c. market adjustments would automatically direct an economy to full employment within a relatively brief period of time. d. budget deficits and surpluses were necessary for the control of economic fluctuations.
If the economy relies entirely on the market mechanism to answer the WHAT, HOW, and FOR WHOM questions, it tends to
A. Overproduce goods that yield external benefits and overproduce those that generate external costs. B. Underproduce goods that yield external benefits and underproduce those that generate external costs. C. Overproduce goods that yield external benefits and underproduce those that generate external costs. D. Underproduce goods that yield external benefits and overproduce those that generate external costs.
The more substitutes there are for a monopolist's product
A) the less elastic is the demand curve. B) the more elastic is the demand curve. C) the steeper is the demand curve. D) the more positively sloped the demand curve becomes.
Price is a limited decision variable in which of the following market organizations?
A. monopoly B. perfect competition C. monopolistic competition D. oligopoly