The multiple by which the commercial banking system can increase the supply of money on the basis of each dollar of excess reserves is equal to:
A. the reciprocal of the required reserve ratio.
B. 1 minus the required reserve ratio.
C. the reciprocal of the income velocity of money.
D. 1/MPS.
A. the reciprocal of the required reserve ratio.
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If the central bank pursues a monetary policy that is more expansionary than what firms and people expect, then the central bank must be trying to
A) boost output in the short run. B) constrain output in the short run. C) constrain prices. D) boost prices in the short run.
Private saving refers to ________
A) after-tax income minus consumption expenditures B) a flow variable which adds to the stock of wealth C) the private saving rate times disposable income D) all of the above E) none of the above
If there are ten firms in a market and each has an equal market share, the Herfindahl-Hirschman Index (HHI) is ________.
A) 10,000 B) 1,000 C) 100 D) 1,500
Price floors lead to market surpluses
a. True b. False Indicate whether the statement is true or false