For a good that is a necessity, demand
a. tends to be inelastic.
b. tends to be elastic.
c. has unit elasticity.
d. cannot be represented by a demand curve in the usual way.
a
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Suppose a bank has $10 million in deposits with no excess reserves, and the reserve requirement is 20%. If the Fed reduces the reserve requirement to 5%, the bank can make a maximum loan of
A) $0. B) $0.5 million. C) $1.5 million. D) $2 million.
An inflationary gap is occurs when
A) real GDP is less than potential GDP. B) real GDP exceeds potential GDP. C) real GDP equals potential GDP. D) the economy is at full employment.
Suppose you are considering buying shares of a stock to hold for one year. The stock has an expected annual dividend of $2 and an expected price at the end of the year of $25
If your required rate of return is 10%, what is the most that you should be willing to pay for the stock? Round off to the nearest cent.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The GDP Price Index rises and monetary base rises. b. The GDP Price Index rises and monetary base falls. c. The GDP Price Index and monetary base fall. d. The GDP Price Index and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.