Most economists agree that the self-correcting mechanism works
a. very slowly.
b. very rapidly.
c. rapidly in the short run and slowly in the long run.
d. slowly in the short run and rapidly in the long run.
a
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Much of the research on the minimum efficient scale suggests that for many firms, economies of scale are:
A) relatively modest. B) nonexistent. C) substantial. D) heavily dependent on the minimum efficient scale of the firm's production process.
The classical economists believed that if the quantity of money doubled
A) output would double. B) prices would fall. C) prices would double. D) prices would remain constant.
All else equal, an increase in net exports accompanied by a decrease in expected future profits would definitely result in
A) an increase in the equilibrium real interest rate. B) a decrease in the equilibrium real interest rate. C) an increase in the equilibrium level of saving and investment. D) a decrease in the equilibrium level of saving and investment.
A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 10 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
a. $200,000; $200,000 b. $200,000; $2,000,000 c. $300,000; $300,000 d. $300,000; $3,000,000