Excess reserves are borrowed funds loaned in excess of legal reserve requirements
Indicate whether the statement is true or false
F
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The price elasticity of demand is calculated as the
A) percentage change in quantity demanded multiplied by the percentage change in price. B) percentage change in quantity demanded divided by the percentage change in price. C) percentage change in price divided by the percentage change in quantity demanded. D) percentage change in quantity demanded plus the percentage change in price.
Money targeting works when the demand for money curve is ________ and predictable. Technological change in the banking system has led to ________ and ________ shifts in the demand for money curve
A) stable; large; predictable B) unstable; large; unpredictable C) stable; small; unpredictable D) stable; small; predictable E) stable; large; unpredictable
Suppose that in a perfectly competitive market, firms are making economic profits. In the long run, we can expect to see:
a. some firms leave. b. the market price rise. c. market supply shift to the left. d. economic profits become zero. e. production levels remaining the same as in the short-run.
If the MPC is 0.6, and the government spends an additional $50b, the overall effect on GDP will be:
A. an increase of $250b. B. a decrease of $25b. C. a decrease of $75b. D. an increase of $125b.