Suppose Diego deposits $4,000 in his bank. If the reserve ratio is 10 percent, this will lead to a maximum increase of ________ in checking account balances throughout all banks
A) $0 B) $4,000 C) $10,000 D) $40,000
D
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If the Fed raises the interest rate, in the foreign exchange market the demand for the U.S. dollar increases
Indicate whether the statement is true or false
Refer to Figure 15-10. What is the area that represents consumer surplus under a monopoly?
A) the triangle P0P2E B) the trapezium P1P2EF C) the rectangle P1P3HF D) the triangle P0P1F
Suppose firms in an industry hire unskilled labor and skilled labor. Unskilled labor is a substitute for capital and skilled labor is a complement with capital. A decrease in the real price of capital would
A) cause the demand for labor to increase, raising wages of both skilled and unskilled labor. B) cause the demand for unskilled labor to increase and the demand for skilled labor to decrease. The wage of unskilled labor would rise relative to the wage of skilled labor. C) cause the demand for unskilled labor to decrease and the demand for skilled labor to increase. The wage of unskilled labor would decrease relative to the wage of skilled labor. D) cause the demand for both kinds of labor to decrease. Wages rates of both kinds of labor would decrease too.
Fiscal policy may be used to slow an expansion in order to fight ______.
a. inflation b. deflation c. unemployment d. stagnation