Suppose banks hold no customary reserves and every time a loan is made, it is taken in cash and not re-deposited in the banking system. Under these circumstances, the:
a. M2 money multiplier equals 0.
b. M2 money multiplier equals 1.
c. M2 money multiplier is greater than one.
d. M2 money multiplier is less than one.
.B
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The Federal Reserve's buying and selling of bonds through their open market operations is an example of fiscal policy
Indicate whether the statement is true or false
Trade is often restricted because the
A) gain per producer is larger than the loss per consumer. B) total gain to all producers is larger than the total loss to all consumers. C) gain per producer is less than the loss per consumer. D) total gain to all producers is smaller than the total loss to all consumers. E) gain per consumer is larger than the loss per producer.
Firms engage in odd pricing when they charge prices that appear to be less than they really are; for example, charging a price of $4.95 instead of $5.00 and $.99 instead of $1.00
How have researchers tried to determine whether odd pricing is successful in convincing consumers that odd prices are less than they really are?
Those economists who believe that monetary policy is more powerful than fiscal policy argue that the
a. LM curve is vertical. b. IS curve is horizontal. c. interest rate elasticity of investment is large. d. interest rate elasticity of investment is small.