Suppose the required reserve ratio is 20 percent. If banks are conservative and choose not to loan all of their excess reserves, the real-world deposit multiplier is
A) less than 5. B) equal to 5. C) greater than 5. D) equal to 20.
A
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The four criteria for economic integration include trade flows, capital flows, people flows, and the similarity of prices in separate markets
Indicate whether the statement is true or false
A major fruit juice manufacturer failed in its attempt to engage in price discrimination between students and all other consumers. What is the most likely explanation for this failure?
a. There was nothing to prevent the students from reselling the fruit juice to other consumers. b. The two groups of consumers have different demand elasticities for fruit juice. c. The cost of producing the product is relatively high. d. Market demand for fruit juice is inelastic.
Economists use some familiar terms in specialized ways
a. to make the subject sound more complex than it is. b. because every respectable field of study has its own language. c. to provide a new and useful way of thinking about the world. d. because it was too difficult to come up with new terms.
According to the theory of efficiency wages, if a firm stops paying efficiency wages it is likely to see a(n)
a. increase in the number of job applicants and an increase in how long workers stay on the job. b. increase in the number of job applicants and a decrease in how long workers stay on the job. c. decrease in the number of job applicants and an increase in how long workers stay on the job. d. decrease in the number of job applicants and a decrease in how long workers stay on the job.