Goods with many substitutes tend to have more price elastic demand curves
Indicate whether the statement is true or false
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If the required reserve ratio is 5 percent, then the simple deposit multiplier is
A) 2. B) 5. C) 10. D) 20.
Everything else held constant, in the market for reserves, increases in the discount rate affect the federal funds rate
A) when the funds rate is below the discount rate. B) when the funds rate equals the discount rate. C) when the demand for federal funds intersects the vertical section of the reserve supply curve. D) when the demand for federal funds equals zero.
When national output declines, the economy is said to be in
A) an expansion. B) a deflation. C) an inflation. D) a recession.
Assume Brandon's benefit function for water is S(W) = ?W and he consumes water both in droughts, WD, or in the rainy season, WR. Assume his current consumption bundle is WD = 400 and WR = 100 and the probability of drought is 0.75. Expected water consumption is:
A. 500. B. 250. C. 325. D. 175.