The cash reserves held by banks that are illegal are called excess reserves
a. True
b. False
Indicate whether the statement is true or false
False
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In a certain economy, the components of aggregate spending are given by:C = 500 + 0.8(Y - T) - 300rI = 200 - 400rG = 200NX = 10T = 150Given the information about the economy above, what would be the impact on short-run equilibrium output of a one-percentage-point increase in the real interest rate from 4 percent to 5 percent?
A. Short-run equilibrium output would decrease by 7 units. B. Short-run equilibrium output would increase by 35 units. C. Short-run equilibrium output would decrease by 700 units. D. Short-run equilibrium output would decrease by 35 units.
If aggregate demand grows only slightly faster than potential GDP, then the economy will ________
A) experience economic growth with high inflation B) experience recession C) experience economic growth with low inflation D) be at a business-cycle peak
In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300. Based on this information, what is the slope of the per-worker production function in this range?
A) 0.03 B) 3.3 C) 33.3 D) 333
Assume a firm lowers price below marginal cost to deter entry
A) This strategy is not credible. B) This strategy is credible. C) This strategy is illegal. D) This strategy is immoral.