The bigger the money multiplier is the:
A. greater the amount of private demand for loans.
B. smaller the reserve ratio must be.
C. less a bank can loan out.
D. less money is created in the economy.
Answer: B
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Keith just got an iPhone 5 for his birthday, and he quickly switches his data over and throws his iPhone 4 in a drawer and forgets about it. Economists would say this behavior is ___________ and would use the concept of ________________ to explain this choice.
A. rational; the implicit cost of ownership B. irrational; the implicit cost of ownership C. irrational; ignoring sunk costs D. rational; considering sunk costs
Suppose that, given the same number of workers, the United States can produce five times as many computers or 10 times as many airplanes as Mexico. Which of the following statements is true?
A. The United States has an absolute advantage in the production of computers, and Mexico has an absolute advantage in the production of airplanes. B. The United States has an absolute advantage in the production of airplanes, and Mexico has an absolute advantage in the production of computers. C. The United States has an absolute advantage in the production of both airplanes and computers. D. Mexico has an absolute advantage in the production of both airplanes and computers.
In real-world markets
a. economic efficiency is rare because making voluntary transactions is difficult b. economic efficiency is rare because Pareto improvements are difficult to make c. economic efficiency is best thought of as a continuum d. perfect competition is an impediment to economic efficiency e. every possible Pareto improvement is exploited
Suppose Carlos has a 60 percent chance of not collecting $100,000 when his rich uncle dies in 10 years. Juanita wants to buy the rights to this possible inheritance from Carlos. How much is the possible inheritance currently worth to Carlos? Assume the interest rate is 9 percent.
A. $25,345. B. $142,042. C. $94,695. D. $16,896.