If fractional reserve banking exists, then:
A. banks need only keep a portion of each deposit on hand.
B. the money multiplier is equal to 1.
C. money cannot be created in the economy through banks.
D. lending would be curtailed to nearly zero.
A. banks need only keep a portion of each deposit on hand.
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
A consumer has maximized his or her utility by consuming
A) at the midpoint of the budget constraint line. B) at the midpoint of the demand curve. C) so that the total utility of all goods consumed is the same. D) so that the ratio of marginal utility to price is the same for all goods consumed.
Which of the following best describes the short-run supply curve for an individual perfectly competitive firm?
A) It is the firm's marginal cost curve. B) It is the upward-sloping part of the firm's marginal cost curve. C) It is the vertical axis at prices less than minimum average variable cost and is the firm's marginal cost curve at prices above minimum average variable cost. D) It is the vertical axis at prices less than minimum average total cost and is the firm's marginal cost curve at prices above minimum average total cost.
The scale of transactions in the international capital market has
A) grown more quickly than world GDP since the early 1970s. B) grown less quickly than world GDP since the early 1970s. C) grown about the same rate as the world GDP since the early 1970s. D) been fixed by international regulations. E) decreased more quickly than world GDP since the early 1970s.