The ratio of money created by the lending activities of the banking system to the money created by the government's central bank is called the:
A. reserve ratio.
B. money multiplier.
C. demand deposits.
D. federal funds.
Answer: B
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Assume toys are produced using only labor and wood. Which of the following best describes the cost of producing toys?
a. The number of dollars that the laborer spends to purchase the wood. b. The amounts of labor and wood used in the production process. c. The alternative uses that could be found for the labor and wood. d. The monetary value of the labor and wood used.
If technology is fixed, monopolization of a competitive industry will lead to
a. lower prices and higher output b. higher prices and the same level of output c. lower output and the same level of price d. higher prices and lower output e. higher output and higher prices
Why does the economy's aggregate demand curve have a negative slope?
Opportunity cost is
A) the intrinsic value of an economic good. B) the total value of all the alternatives forsaken when a choice is made. C) the value of the opportunity selected when a need is satisfied. D) the value of the next highest—ranked alternative that must be sacrificed to obtain a want.