A bank has $200 of reserves and $4,000 of deposits. It is just meeting its desired reserves and has no excess reserves. Thus the desired reserve ratio is
A) 25 percent. B) 10 percent. C) 5 percent. D) $200. E) 20 percent.
C
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If the economy is operating at a point at which short-run aggregate supply is horizontal, then
A) real GDP cannot expand. B) real GDP cannot contract. C) increases in aggregate demand do not increase the price level. D) then increases in aggregate demand do not increase real GDP.
Most Americans experience significant fluctuations in their economic well-being from one year to the next
a. True b. False Indicate whether the statement is true or false
When equilibrium GDP falls below potential GDP, an inflationary gap exists.
Answer the following statement true (T) or false (F)
When a new product is introduced in the market, a consumer always wants to see how popular the item becomes before she purchases it. The consumer's behavior is known as
A. a network effect. B. a rational decision. C. overt collusion. D. an irrelational choice.