In a simplified banking system, the money multiplier falls as the required reserve ratio decreases
a. True
b. False
Indicate whether the statement is true or false
False
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Assume the nominal dollar-per-euro ($/€) exchange rate appreciates by 2%, U.S. prices rise by 5% and Euro-Area prices rise by 3%. By approximately how much does the real exchange rate change?
a. 2% b. 3% c. 1% d. There is no change. e. 5%
If the government adopts an expansionary fiscal policy that requires more government borrowing in the money market, then interest rates are likely to:
A. rise and partially offset the effects of the fiscal policy. B. rise and partially reinforce the effects of the fiscal policy. C. fall and partially offset the effects of the fiscal policy. D. fall and partially reinforce the effects of the fiscal policy.
The consumer optimum is defined as
A) the set of goods and services that maximizes marginal utility for each good. B) the set of goods and services such that the marginal utility of each good equals zero. C) the set of goods and services that maximizes the marginal utility of each good consumed. D) the set of goods and services, subject to the limited income of the consumer, that maximizes the total utility of the consumer.
One of the most important forms of capital income is
A. interest. B. investments. C. dividends. D. rents.