An economic system in which relative prices change to reflect changes in supply and demand for different goods and services is known as a
A) socialist system.
B) communist system.
C) ration.
D) market.
Answer: D
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If reserves in the banking system increase by $100, then checkable deposits will increase by $1000 in the simple model of deposit creation when the required reserve ratio is
A) 0.01. B) 0.10. C) 0.05. D) 0.20.
Why does the economy's aggregate demand curve have a negative slope?
The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in
a. in government expenditures and exports.
b. government expenditures and imports.
c. exports, but not government expenditures.
d. imports, but not government expenditures.
Assume the price of product Y (the quantity of which is plotted on the vertical axis) is initially $15 and the price of X (the quantity of which is plotted on the horizontal axis) is initially $3. Assume money income is initially $60. If the prices of Y
and X now increase to $30 and $6 respectively and money income increases to $120, then the budget line will: A. shift rightward and become steeper. B. shift rightward and become flatter. C. shift rightward, but its slope will not change. D. be unchanged.