The banking system receives a new cash deposit of $250,000 . Total deposits eventually rise by $1 million. The value of the reserve ratio is
a. 25.
b. 4.
c. 0.50.
d. 0.25.
e. 0.20.
d
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Refer to the above figure. Unexpected contractionary monetary policy has caused the aggregate demand curve to shift to AD2. In the short run
A) the unemployment rate will be larger than the rate before the contractionary monetary policy. B) the unemployment rate will be smaller than the rate before the expansionary monetary policy. C) the unemployment rate will be the same rate as before the expansionary monetary policy. D) the unemployment rate can increase or decrease depending upon how much the LRAS will shift.
Joey's lawncutting service recently traded in its push mowers for gasoline-powered mowers. Joey still requires one worker per lawnmower; however, more grass is now cut in the same amount of time as before. This is an example of
A) labor-saving technical change. B) non-neutral technical change. C) neutral technical change. D) organizational change.
Exhibit 7-3 Cost per unit curves
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If the price of the firm's product in Exhibit 7-3 is $1.50 per unit, which intersects AVC at point B, the firm should:
A. continue to operate because it is earning a positive economic profit. B. stay in operation for the time being even though it is making an economic loss. C. shut down temporarily. D. increase the price.
If a country with a fixed exchange rate faces a fundamental disequilibrium because it has a large, ongoing surplus in its official settlements balance, which of the following policies can it employ to try to achieve external balance?
A. Allow the exchange rate to float B. Impose import barriers C. Obtain a loan from the IMF D. Raise interest rates