For this question, assume that individuals do not hold currency (i.e., c = 0). If the ratio of reserves to deposits is .10, the money multiplier is
A) .1.
B) .9.
C) 4.
D) 5.
E) 10.
E
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Market economies tend to grow more quickly than centrally-planned economies
Indicate whether the statement is true or false
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S1 (point C). Which of the following changes would cause the equilibrium to change to point B?
A) a positive change in the technology used to produce motorcycles and decrease in the price of motorcycle insurance, a complement to motorcycles B) an increase in the number of motorcycle producers and an increase in the number of consumers who prefer riding motorcycles C) an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles D) an increase in the wages of motorcycle workers and a decrease in the price of motorcycle insurance, a complement to motorcycles
Capital budgeting projects include all of the following except
A) the purchase of a six-month treasury bill. B) the expansion of a plant. C) the development of a new product. D) the replacement of a piece of equipment.
One way of addressing the associated market failure that generates both private costs and external costs is for this activity to be
A) left alone. B) taxed. C) subsidized. D) banned.