The stock of high-powered money in the economy is $80 billion. The bank reserve-holding ratio is 0.12 and the public wishes to hold 10% of its deposits as cash. The level of bank deposits will be
A) $333 billion.
B) $100 billion.
C) $250 billion.
D) $200 billion.
C
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The U.S. demand curve for foreign currency is drawn holding constant all except one of the following factors. Which is the exception?
a. income in the United States b. the inflation rate in the United States c. incomes in the rest of the world d. the interest rate in the United States relative to the rest of the world e. tastes and preferences of Americans for foreign goods
One of the most famous cartels is OPEC.
Answer the following statement true (T) or false (F)
Although pollution is caused by a failure of the market, many economists believe that the best way to protect the environment is to utilize the price mechanism.
Answer the following statement true (T) or false (F)
The effect of a shift in the aggregate demand curve due to an increase in consumer confidence will be:
A. a decrease in prices only in the long run; output will remain the same. B. an increase in both prices and output in the short run. C. a decrease in both prices and output in the short run. D. an increase in output only in the long run; prices will remain the same.