When a banker accepts a deposit of $1,000 in cash and puts $200 aside as required reserves and then makes a loan of $800 to a new borrower, this set of transactions
a. decreases the money supply by $1,000.
b. decreases the money supply by $200.
c. does not change the money supply.
d. increases the money supply by $200.
e. increases the money supply by $800.
e
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
A stronger dollar leads to lower input prices for U.S. firms because
A) U.S. workers are willing to work for less pay because of the stronger dollar. B) U.S. producers of intermediate goods lower prices in order to benefit from the stronger dollar. C) both exports of raw materials and intermediate goods are lower in prices. D) both imports of raw materials and intermediate goods are lower in prices.
The demand for money is a relationship between _____
Fill in the blank(s) with the appropriate word(s).
Sales taxes on consumer goods are regressive because poor people consume a larger proportion of their incomes than do rich people.
Answer the following statement true (T) or false (F)