Which of the following is NOT likely to occur when a bank fails?
A) Everyone that deposits money in the bank loses all or a portion of their money, unless the country has a functioning deposit insurance system.
B) The loss of savings (or the feared loss of savings) causes households to cut back on consumption, which spreads the recessionary effect wider through the country.
C) Unaffected banks may stop making loans as they take a cautious approach, slowing or stopping new investment.
D) Layoffs occur and the economy falls deeper into a downward spiraling inflation.
E) Other banks make too many loans to make up for the loans not made by the failed bank, kicking off a cycle of stimulation and inflation.
E
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The figure above shows the demand and cost curves for a single-price monopoly. The firm will produce ________ units and set a price of ________ per unit
A) 15; $20 B) 10; $20 C) 10; $30 D) None of the above answers is correct.
Use the three basic questions to describe why perfect competition is efficient
What will be an ideal response?
If the multiplier is 5, the marginal propensity to consume must be 0.8
Indicate whether the statement is true or false
Gasoline and motel rooms are complements for many consumers. When the price of gasoline declines, consumers take longer vacations and rent more motel rooms. Therefore, the cross price elasticity between gasoline and motel rooms is
A. positive. B. negative. C. less than one because neither is a luxury. D. more than one because both are luxuries.