Suppose that the Fed purchases $1,000,000 worth of bonds and that the reserve ratio is 100 percent. Then, the maximum potential expansion of deposits is
A. $100 million.
B. $0.
C. $1,000,000.
D. none of these.
Answer: C
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When psychologists refer to the "Paradox of Choice", what do they mean?
a. More choices may lead people to avoid the decision all together. b. More choices always make people at least as well off (related to the option value principle). c. Risk-averse people sometimes prefer risk because of the thrill it provides. d. If two people with free will make simultaneous decisions, these may sometimes conflict.
A significant feature of developing countries is that they use their labor less efficiently than developed countries
a. True b. False
The term "born with a silver spoon in his mouth" mistakenly implies
A) only monetary endowments allow one to trade with others. B) only the wealthy are strong negotiators in trade. C) endowments are physical. D) endowments differ.
If the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is $5, what is the rental rate for capital?
A) $0.5 B) $1 C) $2 D) $10