If the reserve requirement decreases from 20% to 25% and the currency to deposit ratio increases from 10% to 15% then
a. the money multiplier and the money supply rises.
b. the money multiplier and the money supply stays the same.
c. the money multiplier and the money supply falls.
d. the money multiplier rose and the money supply falls.
B
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For a commodity or token to be money it must
A) be accepted in exchange for all other goods and services. B) have a double coincidence of wants. C) be backed by government precious metals, like gold. D) be paper. E) be issued by the government or a government agency.
If the demand for a good were completely inelastic,
A) the good is a basic necessity. B) the good is a luxury. C) there are no substitutes for the good. D) there had been a long period of time for people to adjust their behavior. E) people who own the good currently do not want to give it up except at much higher prices.
When shopping the consumer is interested in absolute prices
Indicate whether the statement is true or false
Under the gold standard of a century ago, the world's commerce
a. nearly collapsed before the beginning of World War I. b. was at the mercy of gold discoveries. c. grew steadily without interruption from monetary disturbances. d. grew when the gold stock grew slowly, and shrank when gold discoveries increased.