In the 19th century, when crop failures often led to bank runs, banks would make relatively fewer loans and hold relatively more excess reserves. By itself, these actions by the banks should have
a. increased the money multiplier and the money supply.
b. decreased the money multiplier and increased the money supply.
c. increased the money multiplier and decreased the money supply.
d. decreased both the money multiplier and the money supply.
d
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Price discrimination works best when
A. Buyers have information about prices charged to different customers. B. Sellers cannot meet collectively. C. A product is purchased frequently by consumers. D. Buyers do not have perfect information about the price.
Junk bonds, bonds with a low bond rating, are also known as
A) high-yield bonds. B) investment grade bonds. C) high quality bonds. D) zero-coupon bonds.
In the United States during the Great Depression, tariffs were ________ than they were following World War II, and ________ than they are today
A) higher; higher B) higher; lower C) lower; higher D) lower; lower
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.