If the required reserve ratio is 0.2, what is the demand deposit multiplier?
a. 10.0
b. 0.4
c. 5.0
d. 2.5
e. 1.67
C
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The government is most involved in economic decisions in a country with a ______ economy.
a. mixed b. command c. market d. traditional
A World View article titled "Japan Sees Quake Damage Bill of Up to $309 Billion, Almost Four Katrinas" implies that the most likely impact of this destruction would be
A. A decrease in aggregate demand. B. A decrease in aggregate supply. C. An increase in aggregate demand. D. An increase in aggregate supply.
Which of the following is counted as a liability for a bank?
A) customer deposits B) bank reserves C) securities D) bank loans
A firm is currently producing in the inelastic portion of its demand curve. What course of action do you recommend for it, assuming it wants to raise revenue?
A. Continue producing at the current output level, because it maximizes its total revenue by producing in the inelastic portion of its demand curve. B. Continue selling at the same price, but increase the amount it produces. C. Reduce price, because if it reduces price and demand is inelastic, total revenue will increase. D. Increase price, because if it increases price and demand is inelastic, total revenue will increase.