On the "demand side" of a market, consumers indicate what they are willing to buy, in what quantity and at what price
Indicate whether the statement is true or false
TRUE
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The three welfare goals: adequate income, work incentives, and minimize costs are irreconcilable
Indicate whether the statement is true or false
"According to Keynes, the economy is essentially a self-regulating system." Do you agree or disagree? Why?
What will be an ideal response?
Inferior goods have an income elasticity of demand that is
a. positive b. negative c. 0 d. greater than 1 in absolute value e. equal to 1 in absolute value
All of the following except one are reasons the demand deposit multiplier may be smaller in practice than in theory. Which one is not a valid reason?
a. Banks do not want to hold excess reserves. b. Some of the currency generated when bonds are purchased ends up outside of the banking system. c. Banks sometimes hold more than their required reserves. d. An open market operation may change the public's holding of cash. e. All of the above are not valid reasons.