The smaller the amount of short-term money invested in a country, the greater the potential for a crisis if investors lose confidence in the country
a. True
b. False
Indicate whether the statement is true or false
True
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Requiring commercial banks to hold reserves equal to some fraction of their deposit liabilities
A) acts as a constraint on bank lending. B) is an alternative for banks that choose not to use the gold standard. C) is without significance since banks are not required to meet their liabilities on demand by depositors. D) prevents runs on banks by depositors who fear that the banks may not have assets equal to their liabilities. E) really has no effect on the monetary system today.
In setting their prices, price searcher firms ignore
A) demand. B) marginal cost. C) the prices of competitors. D) all of the above. E) none of the above.
Refer to the game between James and Theodore depicted in Figure 12.1. Which of the following is true?
A. If James chooses Up, Theodore's best response is to choose Left.
B. If James chooses Down, Theodore's best response is to choose Right.
C. If Theodore chooses Left, James's best response is to choose Down.
D. If Theodore chooses Right, James's best response is to choose Up.
Using Figure 8.5, if the equilibrium price level is P1, then aggregate demand is
A. AD2, and the equilibrium output level is Q2. B. AD2, and the equilibrium output level is Q1. C. AD1, and the equilibrium output level is Q2. D. AD1, and the equilibrium output level is Q3.