In the Classical model, a decrease in saving will result in saving being __________ than investment which will cause the interest rate to __________
A) greater; rise
B) greater; fall
C) less; rise
D) less; fall
C
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The income elasticity of demand is largest for
A) food. B) clothing. C) shelter. D) luxuries.
Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 75%, and the excess reserve ratio = 156%, an increase in the excess reserve ratio to 200% causes the M1 money multiplier to ________, everything else held constant
. A) increase from 0.15 to 0.33 B) decrease from 0.73 to 0.61 C) increase from 0.54 to 0.67 D) decrease from 1.67 to 1.54
In an Edgeworth box, all points of efficiency occur at the
A) intersections of the indifference curves. B) the points of tangency between the sets of indifference curves. C) in the midpoint of the diagram. D) at any point other than the intersections of the indifference curves.
Sophia sits behind Gabriel on an airplane. Gabriel owns the right to recline his seat and values this right at $10 . Sophia values a non-reclined seat in front of her at $20 . Assuming no transaction costs, an efficient solution would be for Sophia to pay Gabriel $15 to not recline his seat
a. True b. False Indicate whether the statement is true or false