Assume that the reserve ratio is 20 percent and banks in the system are loaning out all their excess reserve. If people collectively cash out $10 billion from their checking accounts, then the lending ability of the banking system will be:
A. Increased by $10 billion
B. Decreased by $10 billion
C. Decreased by $40 billion
D. Decreased by $50 billion
C. Decreased by $40 billion
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What are the two tools of fiscal policy that governments can use to stabilize an economy?
A) taxation and controlling exports B) government spending and taxation C) government spending and technology improvements D) taxation and controlling imports
Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $128,000 a year
Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost? Briefly explain your answers.
Haiti was once a heavily forested country. Today, 80 percent of Haiti's forests have been cut down, primarily to be burned to create charcoal. The reduction in the number of trees has lead to devastating floods when it rains heavily
This is an example of A) human greed. B) the consequences of not having a market economic system. C) the tragedy of the commons. D) tragic externalities.
In 2007, the value of the U.S. dollar
A. increased relative to the euro. B. decreased relative to the euro. C. remained stable relative to the euro. D. was equal to the value of the euro.