The money supply will grow faster through deposit creation when the required reserve ratio is:
A. high and banks hold excess reserves.
B. high and banks cannot find good customers to lend to.
C. low and banks are able to lend out all of their excess reserves.
D. low and banks are unable to loan out all of their excess reserves.
Answer: C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
When Social Security first began, the required contribution levels were _____
a. 2 percent of a worker's pay for all income earned b. 2 percent of a worker's pay for the first $3,000 of income earned c. 1 percent of a worker's pay for the first $3,000 of income earned d. 1 percent of a worker's pay for all income earned
The ability of an asset to hold its value over time is a(n)
A) medium of exchange. B) unit of accounting. C) store of value. D) standard of deferred payment.
Refer to the information provided in Table 8.3 below to answer the question(s) that follow.
Table 8.3
Refer to Table 8.3. The marginal cost of the fourth unit is ________ and the average total cost of four units is ________.
A. $30; $35 B. $20; $45 C. $10; $30 D. indeterminate from the given information