Assume that the Paris First National Bank's loan position contracted from $16 million to $12 million. If the required reserve ratio was increased from 20 percent to 40 percent, how much would the money supply shrink?
a. $5 million.
b. $10 million.
c. $15 million.
d. $20 million.
e. $24 million.
d
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Indicate whether the statement is true or false
The consensus of major econometric models is that monetary policy has
A) no effect on real GDP. B) an effect on real GDP only in the long run. C) a negative effect on real GDP. D) a substantial short-run effect on real GDP.
Consider a monopolist who has a total cost curve of: TC = 7X + (1/2)X2. The market demand equation is X d = 386 - (1/2)P.
A) What are the equilibrium quantity, equilibrium price, and profits in this market? B) Suppose that a unit tax of $1 is placed on the monopolist. What happens to the equilibrium quantity, equilibrium price, and profits? How much tax revenue does the government generate? C) Suppose that the same unit tax of $1 is placed on consumers. What happens to the equilibrium quantity, equilibrium price, and profits? How much tax revenue does the government generate? D) What can be said about the taxes?
The term allocative efficiency refers to
a. the level of output where MC = AVC b. the equality between MR and MC c. the production of those goods and services most valued by consumers d. the point where marginal revenue equals average total cost e. the production of a good up to the point where AFC = 0