An externality is an event which
a. is external to economics.
b. always brings harm to someone in the economy.
c. is incidental to some market activity.
d. harms the economy as a whole rather than a particular person.
c
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A bank has excess reserves of $4,000 and demand deposit liabilities of $100,000 when the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, the bank's excess reserves will be
A) -$5,000. B) -$1,000. C) $1,000. D) $5,000.
Taking out a mortgage to buy a condo, buying a mutual fund, and building a new factory are all examples of investment
a. True b. False Indicate whether the statement is true or false
During the past 20 years, there has been substantial FDI in China. What are the expected shortrun effects of this FDI upon the rental rate on capital and wages in China?
a. The rental rate should increase and wages should decrease. b. The rental rate and wages should both increase. c. The rental rate and wages should both decrease. d. The rental rate should decrease and wages should increase.
The operational components required for truly independent central banks include:
A. the chairperson of the bank being answerable only to the President. B. the ability to have policies reversed. C. monetary policies that cannot be reversed by anyone outside of the central bank. D. a budget controlled by Congress.