Suppose you find $1000 in your attic and decide to deposit it all into your local bank, which must hold 10% as required reserves. The deposit expansion multiplier suggests that this $1,000 "injection" of new money can, in the theoretical limit,
A) increase the money supply by a little more than $1,000.
B) increase the money supply by a little less than $1,000.
C) increase the money supply by only $1,000.
D) increase the money supply by $10,000.
D
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In the long-run ISLM model and with everything else held constant, the long-run effect of a contractionary fiscal policy is to ________ real output and ________ the interest rate
A) not change; not change B) decrease; decrease C) decrease; not change D) not change; decrease
Economists use the phrase, "dollar bills left on the sidewalk" for describing systematically missed opportunities
Indicate whether the statement is true or false
Figure 19-3
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Of the graphs in Figure 19-3, where the dotted line shows the actual exchange rate, which one shows a country with an overvalued currency and a balance of trade deficit?
A. 1 B. 2 C. 3 D. 4
A. the resulting distribution of income is likely to be too equal to maintain production incentives. B. income from inherited property is inconsistent with the theory. C. purely competitive conditions characterize most resource markets. D. it
fails to recognize that resource demand is derived from product demand. A. earnings reflect pricing power rather than marginal revenue product. B. small differences in talent get magnified into huge differences in pay. C. entry and exit rarely occur. D. product demand is typically highly elastic.