A market system solves the
A. “what” and “how” decisions but not the “to whom.”
B. “what” and “to whom” decisions but not the “how.”
C. “how” and “to whom” decisions but not the “what.”
D. “what,” “how,” and “to whom” decisions.
Answer: D
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Why is the money multiplier in the United States smaller than the inverse of the required reserve ratio?
What will be an ideal response?
The opportunity cost of holding money increases when
A) the purchasing power of money rises. B) the nominal interest rate rises. C) the price level falls. D) consumers' real incomes increase.
Goods X and Y are substitutes. If the price of good Y falls, the marginal revenue product of good X
A) will not change. B) will shift out. C) will become more inelastic. D) will shift in.
Explain the relationship between interest rates and the demand for money, as described by the Keynesians