Imagine that Wingate National is a new bank, and that the legal reserve requirement is 10 percent. If it accepts a $1,000 deposit, then, before lending occurs, its excess reserve balance is
a. $0
b. $90
c. $100
d. $900
e. $910
D
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If the marginal total cost when moving from Option A to Option B is negative and the marginal total cost when moving from Option B to A is positive, which of the two options is better? What is the underlying principal behind the decision?
What will be an ideal response?
Gross domestic product (GDP) is not a perfect measure of welfare because it: a. treats a dollar spent on guns the same as a dollar spent on education. b. treats a dollar spent on exports the same as a dollar spent on imports. c. double counts the value of leisure time
d. double counts depreciation. e. counts illegal activities in the underground economy.
Which of the following would be an example of government intervention to correct a market failure caused by buyers having inadequate information about sellers?
A. Providing unemployment compensation insurance B. Sponsoring legislation to reduce pollution C. Licensing of medical doctors and surgeons D. Requiring all car drivers to buy auto insurance
Which of the following is not a characteristic of the classical system?
a. temporary excess demand and supply in labor markets. b. Price flexibility c. Money wage flexibility d. real values, not nominal values, matter