How are money cost and opportunity cost related to each other?
a. If markets function well, they are closely related.
b. They are always identical in any economic system.
c. Opportunity cost always exceeds money cost.
d. Money cost is less than or equal to opportunity cost.
e. In a market economy, they are always equal to each other.
a
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Classical economists believe that
a. velocity varies directly with the money supply b. changes in the money supply affect real GDP c. the quantity of money explains prices d. the money supply affects velocity e. there are three motives involved in the demand for money
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Which of the following statements is correct?
A. The actual reserves of a commercial bank equal its excess reserves minus its required reserves. B. A bank's liabilities plus its net worth equal its assets. C. When borrowers repay bank loans, the supply of money increases. D. A single commercial bank can safely lend a multiple amount of its excess reserves.
If orange juice prices double next year, there will be a
A. rightward shift in the demand for grapefruit juice. B. rightward shift in the supply of grapefruit juice. C. leftward shift in the supply of grapefruit juice. D. leftward shift in the demand for grapefruit juice.