Real-world accuracy of the money multiplier can be affected by:
a. the amount of loans provided by nonbanks.
b. the way the public divides its holding of M1 between currency and certificates of deposit.
c. the willingness of banks to loan excess reserves.
d. all of these.
d
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If the price of iPods rises 10 percent during a year when the level of average prices rises 3 percent, the relative price of iPods compared with other goods
A. Decreases. B. Remains constant. C. Increases. D. More information is required to answer this question.
The owner of Tie-Dyed T-shirts, a perfectly competitive firm, hires you to give him economic advice. He tells you that the market price for his shirts is $15 and that he is currently producing 200 shirts at an AVC of $10 and an ATC of $20. You tell him he should continue to operate in the short run because
A. he is earning an economic profit of $4,000. B. he has to pay this fixed costs of $2,000 if he shuts down which is greater than his loss when he operates. C. In fact you do not tell him to operate-he should shut down since he has a loss. D. his loss from operating in only $2,000 which is less than his loss if he shuts down.
Consumer surplus measures
A) the extra amount that a consumer must pay to obtain a marginal unit of a good or service. B) the excess demand that consumers have when a price ceiling holds prices below their equilibrium. C) the benefit that consumers receive from a good or service beyond what they pay. D) gain or loss to consumers from price fixing.
An example of a perfectly competitive market would be the
a. cable TV market. b. soybean market. c. breakfast cereal market. d. shampoo market.