A gamble that offers a 1 percent chance of winning $699.93 and a 99 percent chance of losing $7.07 would be classified as a(n):
A. better-than-fair gamble.
B. less-than-fair gamble.
C. unfair gamble.
D. fair gamble.
Answer: D
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Banks cannot influence the money supply if they hold all deposits in reserve.
Answer the following statement true (T) or false (F)
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Assume leisure is an inferior good instead of a normal good. The income effect of a wage decrease will lead to a ________ demand for leisure and a ________ labor supply.
A. higher; lower B. lower; higher C. lower; lower D. higher; higher
Which of the following should be expected if the tax for a certain good increases?
A. price of the good increases. B. the composition of the commodity bundle is distorted. C. the budget line pivots out. D. the composition of the commodity bundle is distorted and the price of the good increases.