If an earthquake destroys most of a country's steel mills, then the country's supply curve of steel will shift to the left
Indicate whether the statement is true or false
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When a commercial bank lends $1000 to a customer, and the loan proceeds are spent by the customer, the legal reserves of the banking system
A) decline by $1000. B) do not change unless the loan proceeds are withdrawn in currency. C) rise by $1000. D) rise by more than $1000 because spending increases nominal GDP.
An increase in demand for a nation's currency in the foreign exchange market will:
a. cause the nation's currency to appreciate. b. make it more expensive for the nation to import goods. c. cause the nation's balance on current account to shift toward a surplus. d. make it less expensive for foreigners to buy the nation's goods.
Which of the following causes the aggregate supply curve to rise?
a. An increase in a nation's level of productivity. b. A decrease in input prices. c. An increase in the value of the domestic currency. d. All of these answers are correct.
The Paradox of Leverage states that:
a. Excessive leverage is really just an illusion. It occurs when companiesmisestimate the value of their assets and equity. b.When a single firm, in isolation, tries to de-lever its balance sheet, the net effect is often for its leverage to rise. c. Leverage is a puzzle (i.e., a paradox) and always will be. d. When a large portion of the market tries to de-lever its balance sheet, asset prices fall, thereby causing leverage to increase (not decrease). e. None of the above.