Which of the following represents the money multiplier?
A. 1 ÷ (required reserve ratio).
B. (Total reserves - required reserves) × multiplier.
C. Total reserves - required reserves.
D. Required reserve ratio × total deposits.
Answer: A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
The network effect in the TV broadcasting industry results in
A) a positive market feedback between the number of advertisers and the size of TV audience. B) a negative market feedback between the number of advertisers and the size of TV audience. C) a positive market feedback between the number of advertisers and the number of TV channels. D) a negative market feedback between the number of advertisers and the number of TV channels.
The lesson from economic history is that
a. income inequality is a 21st century phenomenon. b. ancient societies represent most egalitarian models. c. inequality and poverty characterized many ancient societies. d. none of the above.
Which statement is not consistent with the law of supply?
A. More of a good will be supplied, the higher the price, other things constant. B. Quantity supplied of a good is inversely related to the good's price. C. Quantity supplied of a good is directly related to the good's price. D. Less of a good will be supplied, the lower the price, other things constant.