If the reserve ratio is designated by "r," the amount of deposits a bank can lend out is equal to [D × (1 - r)]
Indicate whether the statement is true or false
TRUE
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In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then over this range of output there are
A) constant economies of scale. B) constant returns to scale. C) diseconomies of scale. D) economies of scale. E) constant diseconomies of scale.
Which of the following is not a common effect of imposing a rent control?
a. Discriminatory practices by landlords. b. More time on waiting lists and searching for housing. c. A "black market" for rentals. d. An excess supply of rentals at the controlled price.
Which of the following would be an external cost to the consumption of cigarettes?
a. Price of a pack of cigarettes. b. Loss of income resulting from extra missed days of work. c. Higher life insurance premiums due the practice of smoking. d. The loss in utility received because the smoker must stand outside her office building in the winter to smoke. e. Increased risk of cancer to the nonsmoking passengers in the smoker's carpool.
Governments can most effectively encourage a firm to produce the efficient level of output of a good whose production causes a beneficial externality by
A. increasing the demand at every price for the good. B. subsidizing the production of the good. C. taxing the production of the good. D. imposing a price ceiling on the good.