Which of the following statements is not true about a market system?
a. The market system provides an incentive to consumers to acquire purchasing ability.
b. The market system magnifies the problem of scarcity of goods and services.
c. The market system provides an incentive for allocating resources.
d. The market system provides an incentive to improve the quality of goods produced.
e. The market system provides everything everyone wants to consume.
b
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In our modern financial system, money is created
A) only by central banks. B) only by the banking system. C) by central banks and the banking system. D) only by federal governments.
If a bank has excess reserves of $10,000 and demand deposit liabilities of $80,000, and if the reserve requirement is 20 percent, then the bank has actual reserves of
A) $16,000. B) $20,000. C) $26,000. D) $36,000.
Suppose the economy is experiencing a recessionary gap. In the long run, the money wage rate ________, unemployment ________, and the price level ________.
What will be an ideal response?
The economy experiences both inflation and unemployment when
A. aggregate demand decreases and aggregate supply remains unchanged. B. aggregate demand increases and aggregate supply decreases. C. aggregate demand decreases and aggregate supply increases. D. aggregate supply decreases and aggregate demand remains unchanged.