Excess reserves fuel the deposit expansion process, and a lower reserve requirement drains this fuel from the banking system, thereby reducing the amount of new money in that can be created
Indicate whether the statement is true or false
false
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Suppose there are two goods: guns and roses. Also suppose Australia is initially closed to trade. When international trade is opened, Australia chooses to sell guns and buy roses in the world markets.
(i) Which is higher, Australia's autarkic relative price of guns or the world relative price of roses? (ii) If the world relative price of guns falls, will Australia be better off or worse off? What if the world relative price of guns rises? Explain.
If the marginal product of the second worker hired by a firm is 14 units and the price of the tenth unit of output is $7, then the marginal revenue product
a. of the second worker is $98, regardless of the structure of the product market b. of the second worker is $98 if the firm is a price searcher in the product market c. of the second worker is $98 if the product market is perfectly competitive d. of the tenth worker is $98 if the product market is perfectly competitive e. of the tenth worker is $98 if the firm is a price searcher in the product market
One drawback of fiscal policy is the time it takes to enact the legislation necessary to activate it
a. True b. False Indicate whether the statement is true or false
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P2 and Y2. B. P1 and Y2. C. P4 and Y2. D. P1 and Y1.