If the actual money multiplier equals the potential money multiplier and if the Federal Reserve wishes to increase the money supply by $500 when the reserve ratio is 20 percent, it should
A. sell $1,000 of government bonds.
B. buy $1,000 of government bonds.
C. buy $100 of government bonds.
D. sell $100 of government bonds.
Answer: C
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Transfer payments are:
A. spending that transfers resources from the government to individuals. B. payments that individuals make to the government. C. when individuals transfer stock ownership in lieu of payment with cash or other liquid assets. D. when individuals transfer cash for payments of a good or service.
Larry's Lunchcart is a small street vendor business. If Larry makes 15 pretzels in his first hour of business and incurs a total cost of $16.50, his average total cost per pretzel is
a. $1.10. b. $6.50. c. $15.00. d. $16.50.
Which statement is true?
A. An effective price ceiling is above equilibrium price and causes surpluses. B. An effective price ceiling is above equilibrium price and causes shortages. C. An effective price ceiling is below equilibrium price and causes surpluses. D. An effective price ceiling is below equilibrium price and causes shortages.
Considering foreign exchange transactions:
A. the U.S. dollar is exchanged in roughly 50% of all currency transactions. B. most of these transactions are handled in New York. C. more transactions are handled in London than anywhere else. D. all transactions involve the use of the U.S. dollar.