If a bond dealer sells a government bond to the Fed for $100,000, and the reserve ratio is 10 percent, then the bank that receives a $100,000 deposit from the dealer can expand its loans by ________,
and the money supply can increase by as much as ________.
A) $80,000; $800,000
B) $10,000; $100,000
C) $90,000; $1,000,000
D) $90,000; $900,000
C
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Complete Milton Friedman's famous statement, "Inflation is always and everywhere a ________ phenomenon."
A) recessionary B) discretionary C) repressionary D) monetary
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, a decrease in the currency-checkable deposit ratio will mean
A) an increase in currency in circulation and an increase in the money supply. B) an increase in money supply. C) a decrease in the money supply. D) an increase in currency in circulation but no change in the money supply.
The production possibilities curve shows the different combinations of goods that can be produced with a set of given resources
Indicate whether the statement is true or false
Suppose your accountant told you that the $50,000 you made last year was your normal profit. When you asked him what your accounting profit was he replied that it was precisely the same as your normal profit. You wouldn't have to ask what your economic profit was because you know it must be
a. 0 b. $50,000 c. $100,000 d. $50,000 loss e. $100,000 loss