If a single bank faces a required reserve ratio of 20 percent, has total reserves of $500,000, and checkable deposits of $400,000, the maximum amount of money this bankcould increase the money supply is
A. $420,000.
B. $100,000.
C. $80,000.
D. $2,100,000.
Answer: A
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Refer to Scenario 1-4. Had the firm not produced and sold the last 500 cigars, would its profit be higher or lower, and if so by how much?
A) Its profit would be $500 lower. B) Its profit would be $1,500 lower. C) Its profit would be $500 higher. D) Its profit would be $1,000 higher.
The non-activists believe that
A) the government has been a stabilizing force in the economy. B) much of the existing unemployment voluntary. C) the velocity of money is unstable. D) policymakers are able to accurately forecast the future effect of current policy actions.
Most goods that are nonexcludable are pure public goods.
A. True B. False C. Uncertain
Economists before Keynes assumed that equilibrium GDP occurred
A. automatically. B. only with the help of government stabilization. C. if spending was generally greater than output. D. only in socialist economies with central planning.