If the marginal propensity to save is 0.40, a $20 billion increase in investment spending would cause equilibrium output to:
a. increase by $50.
b. increase by $80.
c. decrease by $33.
d. decrease by $40.
e. decrease by $20.
a
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If a natural monopoly is told to set price equal to average cost, then the firm
A) is not able to set marginal revenue equal to marginal cost. B) automatically also sets price equal to marginal cost. C) will make a substantial economic profit. D) will incur an economic loss. E) sets a price that is lower than its marginal cost.
According to economist Emmanuel Saez, between 1993 and 2010, the incomes of the richest 1 percent grew by ________, and the other 99 percent grew by ________ on average.
A. 58 percent; 64 percent B. 5.8 percent; 6.4 percent C. 58 percent; 6.4 percent D. 5.8 percent; 64 percent
An increase in the reserve requirement
A. increases the money multiplier and increases the money supply. B. reduces the money multiplier and reduces the money supply. C. increases the money multiplier and reduces the money supply. D. none of these.
Refer to the data. Assuming the bank loans out all of its remaining excess reserves as a checkable deposit, and has a check cleared against it for that amount, its reserves and checkable deposits will now be:
Use the following balance sheet for the ABC National Bank in answering the question. Assume the required reserve ratio is 20 percent.
A. $25,000 and $122,000 respectively.
B. $22,000 and $110,000 respectively.
C. $32,000 and $115,000 respectively.
D. $22,000 and $105,000 respectively.