Explain what a potential money multiplier of 3 means. How can the Fed increase the potential money multiplier?
It means that every $1 increase in demand deposits can potentially support new demand deposits of $3 . The
Fed can increase the potential money multiplier by lowering the legal reserve requirement.
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An example of statistical discrimination would be:
A. charging young drivers a higher premium than older drivers. B. charging homes near a lake higher premiums for flood insurance than those on a hill. C. assuming the food will be better at an Italian restaurant than a Chinese one in the Little Italy neighborhood of NYC. D. All of these are examples of statistical discrimination.
Transfer prices can be set in such a way so as to maximize profits for an entire business
Indicate whether the statement is true or false
When labor inputs are finely divisible, the average product of labor curve is ______ sloping at L if the marginal product is ______ the average product.
A. downward; above B. upward; above C. upward; below D. vertical; equal to
If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes take
place in this market? What will be an ideal response?