Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand for Flat-screen TVs: the technology required for flat-screen TV production becomes cheaper.
A. A.
B. B.
C. C.
D. D.
Answer: B
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If the currency drain ratio is 30 percent and the desired reserve ratio is 10 percent, the money multiplier is
A) 0.80. B) 1.25. C) 3.25. D) 5.00. E) 10.0.
Demand for Snickers bars will decrease if:
A. the price of Snickers bars decreases. B. a news story claiming 95% of all geniuses eat at least one Snickers bar a day is released. C. the price of Milky Way bars (a substitute) decreases. D. the price of Milky Way bars (a substitute) increases.
Proved reserves are likely to underestimate the total quantity of the resource in the ground because
a. of flaws in information flows between countries. b. government agencies have an incentive to keep reserves secret. c. of future improvements in technology and higher future prices. d. scientists have not been able to use the latest techniques to estimate reserves in less developed countries.
If the public takes funds from currency in circulation and deposits them into their checking accounts, the:
a. Monetary base and M2 money multiplier rise. b. Monetary base and M2 money multiplier fall. c. Monetary base and M2 money multiplier do not change. d. Monetary base falls, and M2 money multiplier rises. e. Monetary base does not change, and M2 money multiplier rises.