No matter what banks do, when the legal reserve requirement is 20 percent, the potential money multiplier is
a. 0.2
b. 1.2
c. 2
d. 2.5
e. 5
E
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The four important characteristics that define a perfectly competitive market are:
A. standardized good, full information, no transactions costs, participants are price takers. B. standardized information, finished good, no transactions costs, participants are price makers. C. standardized good, same information for buyer and seller, low transactions costs, participants are price takers. D. standardized good, full information, no transactions costs, participants are price makers.
If the dollar depreciates, both the aggregate demand curve and the aggregate supply curve shift inward
a. True b. False Indicate whether the statement is true or false
Each of the following is an example of discretionary fiscal policy, except
A. public works programs. B. changing tax rates. C. changes in the level of government spending. D. unemployment insurance benefits.
Many banks offer accounts featuring “Automatic Transfer from Savings” allowing customers to overdraw checking accounts and the bank will transfer enough funds to cover the check automatically. Most likely, what is the effect of this feature on velocity?
A. Velocity will decrease. B. Velocity will increase. C. Velocity will remain constant. D. Velocity is unrelated to saving accounts.