If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the M1 money multiplier is
A) 2.5.
B) 1.67.
C) 2.0.
D) 0.601.
A
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Assume the supply curve for cigars is a typical, upward-sloping straight line, and the demand curve for cigars is a typical, downward-sloping straight line. Suppose the equilibrium quantity in the market for cigars is 1,000 per month when there is no tax. Then a tax of $0.50 per cigar is imposed. The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by
sellers falls from $1.50 to $1.40 . The government's tax revenue amounts to $475 per month. Which of the following statements is correct? a. The demand for cigars is less elastic than the supply of cigars. b. The tax causes a decrease in consumer surplus of $390 and a decrease in producer surplus of $97.50. c. The deadweight loss of the tax is $12.50. d. All of the above are correct.
Consider two people, Sandy Ross, who earns $25,000, and Gary Belcher, who earns $50,000. If the flat-tax rate is 20 percent, then:
A. the government collects a total of $20,000. B. Gary pays twice the tax amount Sandy pays. C. Gary pays three times the tax amount Sandy pays. D. Gary and Sandy pay exactly the same tax amount.
Countries with small amounts of capital per worker tend to have ________ levels of real GDP per person and ________ levels of average labor productivity.
A. low; low B. high; high C. low; average D. high; low
Refer to the given data. Beta:
Answer the question on the basis of the following production possibilities data for two countries, Alpha and Beta, which have populations of equal size.
A. should specialize in catching fish and trade with Alpha for chips.
B. should specialize in producing chips and trade with Alpha for fish.
C. will not realize gains from specialization and trade.
D. will export both fish and chips to Alpha.