An increase in the reserve requirement from 20 percent to 25 percent is most likely to:
a. reduce total deposits in the banking system.
b. reduce excess reserves and the deposit expansion multiplier.
c. increase the money supply.
d. reduce the amount of reserves required.
e. increase total deposits and the deposit expansion multiplier.
b
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Since the slope of a downward-sloping demand curve is constant, the price elasticity of demand does not change when moving along this line
a. True b. False Indicate whether the statement is true or false
If the government imposes price controls and prevents prices from adjusting naturally to supply and demand, a. it equates the amount buyers are willing and able to buy with the amount sellers are willing and able to supply. b. it adversely affects the allocation of resources
c. it improves both equality and efficiency. d. it improves efficiency.
An increase in the wages paid to fishermen will have what effect on the fish market equilibrium?
a. Price will decrease, and quantity will decrease. b. Price will increase, and quantity will increase. c. Price will decrease, and quantity will increase. d. Price will increase, and quantity will decrease. e. Price and quantity will stay the same.
What is the difference between the Keynesian and rational expectations theories concerning the success of stabilization policy?
What will be an ideal response?