Vault cash is equal to $2 million, deposits by depository institutions at the central bank are $1 million, the monetary base is $15 million, and bank deposits are $30 million. Bank reserves are equal to
A. $5 million.
B. $2 million.
C. $3 million.
D. $10 million.
Answer: C
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Suppose the market-clearing price of guitars is $500, but the prevailing price is currently $700. Pick the correct statement
A) There is a shortage of guitars. B) Guitar sellers would not be able to successfully sell all they planned to sell. C) Guitar buyers would not be able to successfully buy all they planned to buy. D) All of the above are true. E) None of the above is true.
Which of the following statements about a well-maintained yard best conveys the general nature of the externality?
a. A well-maintained yard conveys a positive externality because it increases the home's market value. b. A well-maintained yard conveys a negative externality because it increases the property tax liability of the owner. c. A well-maintained yard conveys a positive externality because it increases the value of adjacent properties in the neighborhood. d. A well-maintained yard cannot provide any type of externality.
Milo drives to work 30 miles on the freeway every day. Briefly explain what type of spillover Milo’s actions are creating, and explain why it is this type of spillover and how it influences others.
What will be an ideal response?
The economic model of consumer behavior predicts that
A) consumers will try to earn as much income as they can over their lifetimes. B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy. C) consumers will try to accumulate as many goods and services as they can before they die. D) consumers divide their time between consumption and leisure activities in order to maximize social welfare.