Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only form of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum of:
a. $2,000.
b. $8,000.
c. $10,000.
d. $9,000.
b
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"Increasing income tax rates will solve the Social Security time bomb issue" is an example of
A) business economic policy. B) a positive economic statement. C) marginal cost exceeding marginal benefit. D) answering the "how" question. E) globalization.
The St. Louis Federal Reserve Bank econometric model indicates that crowding out
A) is only partial. B) never occurs. C) occurs only in highly unusual circumstances. D) is complete.
At the end of 2009, the national debt stood at 60 percent of GDP, substantially higher than its World War II level
a. True b. False
A downward-sloping portion of a long-run average total cost curve is the result of
a. economies of scale. b. diseconomies of scale. c. diminishing returns. d. the existence of fixed resources.