If bank customers decide as a group to pay off their loans and to not take out any new loans, ceteris paribus,
A. The money supply will increase.
B. The money supply will decrease.
C. Excess reserves will decrease.
D. The money multiplier will decrease.
Answer: B
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Institutional reversal refers to the fact that:
A) the same institutions that were highly inclusive in the year 1500 slowly changed into extractive institutions as a result of modernization. B) Europeans established more extractive institutions in places that were previously more developed, and set up more inclusive institutions that were previously less developed. C) Europeans established more extractive institutions in places that were previously less developed, and set up more inclusive institutions that were previously more developed. D) the same institutions that were highly extractive in the year 1500 slowly changed into inclusive institutions as a result of modernization.
The assertion "capital is productive, but the ownership of capital is not," assumes the efficient use of resources
A) is different from technological efficiency and more difficult to achieve. B) is no more likely under one ownership arrangement than another. C) may be significantly affected by transferring ownership from private to public hands. D) sometimes is affected by transferring ownership from public to private hands.
In the two-country model of the Monetary Approach, the spot exchange rate is determined by
A) the relative quantities of money supplied and demanded. B) the real money stock in country A vs. country B. C) the nominal incomes in the two countries. D) the ratio of prices in the economies.
An opponent of monetary policy decisions by rule would point to which of the following as support of his case?
a. time inconsistency of policy b. flexibility to confront unforeseen circumstances c. political business cycle d. the ability to craft rules that account for all possible contingencies in advance