Back to the text: Amar is a safekeeper of people's gold (their money). He is a smart businessman who does not gamble and keeps 20 percent of the deposited gold on reserve to handle the transactions demands of depositors. Amar holds to a sound
a. excess reserve depletion rate
b. liquidity of money
c. volatility of money
d. fractional reserve rule
e. quantity theory of money
D
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If the market price faced by a perfectly competitive firm increases, in the short run how does the firm respond?
What will be an ideal response?
If the forward exchange rate of the dollar in terms of pounds is less than the spot exchange rate,
A) inflation must be lower in the United States than in Britain. B) inflation must be higher in the United States than in Britain. C) market participants must be expecting the dollar to appreciate against the pound. D) market participants must be expecting the dollar to depreciate against the pound.
If a perfectly competitive firm is producing at a quantity at which MC < AVC, it cannot be maximizing profit in the short run
a. True b. False
In a closed economy, national savings is:
A. equal to national investment. B. the sum of the savings of individuals and corporations plus the savings of the government. C. the sum of public savings plus private savings. D. All of these are true.