Suppose you found $10,000 hidden under a rock and deposited it in a demand deposit account at your bank. If the reserve requirement was 10 percent, your deposit would initially add ____ to total demand deposits and over time increase the money supply by a maximum of ____
a. $10,000; $100,000
b. $10,000; $90,000
c. $1,000; $90,000
d. $1,000; $9,000
a
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Markets provide
A) information. B) prices. C) incentives. D) all of these choices.
Which of these is an example of a good with elastic supply?
a) large hand-made rugs b) plums c) sandwiches d) passenger airplanes
According to the text, which of the following factors may make the theory of purchasing power parity unrealistic?
A) Trading countries may stop exchanging goods once prices between them equalize. B) Shipping, insurance, and transaction costs may reduce the implication of purchasing power parity. C) Prices may not equalize if goods arbitrage is reduced by trade barriers. D) The effects of purchasing power parity may not show up until many years have passed.
The aggregate demand curve is the sum of all demand curves of all goods and services in the economy.
Answer the following statement true (T) or false (F)