The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place
a. True
b. False
Indicate whether the statement is true or false
True
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If resale is easy, then
A) price discrimination won't work, because then only low-priced goods are sold. B) consumers' demand curves will shift to the low-priced good. C) firms will stop providing the good. D) price discrimination results in lower consumer surplus.
Teenage unemployment rates tend to be a little lower than the overall unemployment rate.
Answer the following statement true (T) or false (F)
One reason the Chinese buy a great deal of U.S. government debt is because:
A. they have dollars left over from the sale of their goods to the U.S. and want to buy something dollar denominated. B. the risk involved is lower for U.S. government bonds than for any other government bond in the world. C. the rate of return for U.S. government bonds is higher than any other investment. D. owning US debt is a sign of economic prosperity for China.
The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.07. The excess reserve ratio, e, is 0.10. What is the size of the money multiplier?
A) 4.70 B) 4.07 C) 4.75 D) 4.00