If 2015 is the base year, the bundle price of goods in 2015 is $750, and the bundle price of goods in 2016 is $1,000, the 2016 price index is
A. 75.
B. 125.
C. 133.3.
D. 166.7.
Answer: C
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If the required reserve ratio is 15 percent, the simple deposit multiplier is
A) 15.0. B) 1.5. C) 6.67. D) 3.33.
Which of the following combinations would unambiguously decrease the supply of money? a. The Fed pays a lower interest rate on bank reserves and increases the required reserve ratio
b. The Fed conducts an open market purchase of government securities and raises the discount rate. c. The Fed pays a higher interest rate on bank reserves and conducts an open market purchase of government securities. d. None of the above would unambiguously decrease the supply of money.
Assume the economy is at full employment and prices are reasonably stable. If the government wants to increase spending for public schools, which of the following policies will have the least inflationary impact?
A. An increase in taxes by an amount greater than the increase in spending. B. An increase in taxes equal to the increase in spending. C. An increase in taxes by an amount smaller than the increase in spending. D. No change in taxes when expenditures increase.
Suppose the domestic supply (QS) and demand (QD) for skateboards in the United States is represented by the following set of equations:QS = -60 + 3PQD = 390 - 2PIf the United States can import skateboards from the rest of the world at a per unit price of $75, how many skateboards will be produced in the United States?
A. 285 B. 240 C. 165 D. 215