Economists have used ________ and ________ in experiments designed to determine whether consumers care about fairness when they make decisions
A) Giffen goods; luxury goods
B) the income effect; the substitution effect
C) the ultimatum game; the dictator game
D) network externalities; the endowment effect
Answer: C
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After the Federal Reserve increases reserves in the banking system, banks create new deposits through multiple rounds of lending and accepting deposits until the:
A. actual reserve/deposit ratio is greater than the desired reserve/deposit ratio. B. Federal Reserve requires them to stop. C. actual reserve/deposit ratio is equal to the desired reserve/deposit ratio. D. deposit insurance limit is reached.
If an asset can be obtained or disposed of without much risk of losing its nominal value, it is said to be
A) valuable. B) wealth. C) fiduciary. D) liquid.
The primary determinant of patterns of interregional trade is
A) accidents of history. B) resource allocations. C) factor abundance. D) weather. E) centralized optimization.
Policies to keep inflation in check ________
A) are, typically, fiscal policies B) are a potential cause of high unemployment C) are unlikely to be needed, so long as government spending remains high D) include increasing the quantities of money and saving E) are desirable in the short run, but may produce bad long-run outcomes