The more excess reserves banks choose to keep
A) the larger the deposit multiplier.
B) the smaller the deposit multiplier.
C) the higher the required reserve ratio.
D) the lower the required reserve ratio.
Answer: B
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Asymmetric information arises when:
a. both the parties to an exchange have perfect information about the good. b. none of the parties to exchange have any information about the good. c. one party to an exchange knows more than the other party. d. a good is provided by the government. e. the market is perfectly competitive.
Which of the following combinations would unambiguously increase the supply of money? a. The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio
b. The Fed conducts an open market purchase of government securities and raises the discount rate. c. The Fed pays a higher interest rate on bank reserves and conducts an open market purchase of government securities. d. All of the above would produce conflicting effects on the supply of money
What is the opportunity cost of moving from point A to point B?
Hypothetical Production Schedule for Two-Product Economy
Policies which promote good governance of a society are:
A. uncommon in nations with high growth rates. B. based on favoritism. C. not important to pursue in developing countries. D. central to economic growth.