Suppose the Fed reduces the reserve ratio from 0.25 to 0.20 and the current level of demand deposits is $10,000 . By how much would excess reserves change?
a. Excess reserves would increase by $2,500.
b. Excess reserves would increase by $2,000.
c. Excess reserves would decrease by $500.
d. Excess reserves would increase by $500.
e. Excess reserves would increase by $4,500.
D
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Resources include
A. land, labor and money. B. entrepreneurship and capital. C. capital and money. D. corporations and partnerships.
One implication of compensating differentials is that laws passed to protect the health and safety of workers may not make workers better off than they were prior to the passages of the laws. Why is this so?
A) Workers may suffer from cognitive dissonance, which means that the perception workers have that their jobs are hazardous is not true. B) If the laws make the work environment safer, there is no reason to pay workers a compensating differential for the risk associated with their jobs. C) In non-competitive markets, workers are unlikely to receive a compensating differential to compensate for jobs with extra risk. As a result, after the laws are passed their wages will not change. D) The principal-agent problem that exists in the workplace may cause workers to shirk more after the work environment becomes safer.
According to Coase,
a. government regulation will almost always be necessary to eliminate negative externalities b. externality problems can be solved efficiently by the assignment of property rights if transaction costs are low c. when bargaining costs are high, it is necessary to assign property rights d. assignment of property rights will lead to equitable but inefficient solutions to externality problems e. there really is no externality problem with renewable resources
Exchange rate refers to the quantity of one good exchanged for a unit of another good
Indicate whether the statement is true or false