Vault cash is equal to $2 million, deposits by depository institutions at the central bank are $1 million, the monetary base is $15 million, and bank deposits are $35 million. Currency held by the nonbank public is
A) $3 million.
B) $12 million.
C) $15 million.
D) $20 million.
B
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Suppose a single-input production function has initially increasing but eventually decreasing marginal product. In this case, the first order condition for the profit maximization problem
A. is necessary for identifying the profit maximizing production plan. B. is sufficient for identifying the profit maximizing production plan. C. is both necessary and sufficient for identifying the profit maximizing production plan. D. is neither necessary nor sufficient for identifying the profit maximizing production plan.
The right decision about what to produce and who to trade with happens:
A. almost entirely by market decisions automatically. B. when governments publish comparative advantage numbers. C. only after firms research the cost of inputs such as labor and raw materials, and the sale prices of different goods you could produce, and calculate the most profitable option. D. governments from different countries get together to decide on trade.
Explain Gresham's Law
The equilibrium wage rate in an industry is determined by
A) finding where the market supply curve indicates that the substitution effect and income effect of a wage increase are offsetting. B) the intersection of the market demand curve for labor and the market supply curve for labor. C) the strength of the substitution effect relative to the elasticity of demand for labor. D) whether workers or management are better at negotiating.