Which of the following will limit the expansion of the money supply following a new deposit?
A. a strong demand for new loans
B. a strong demand for holding currency outside of commercial banks
C. a re-depositing of all loan proceeds
D. failure of banks to voluntarily hold excess reserves
Answer: B
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In the long run, a monopolistically competitive firm
A) earns zero economic profit. B) produces at minimum average cost. C) operates at full capacity. D) All of the above.
In a consumer-oriented economy, the decision to save in order to promote economic growth: a. means a sacrifice of current consumption in order to enhance future consumption. b. must be enforced by high levels of taxation
c. cannot be expected to benefit future generations. d. none of the above.
In a market with perfectly competitive firms, the market demand curve is usually ____ and the demand curve facing each individual firm ____
a. upward sloping; horizontal b. downward sloping; horizontal c. horizontal; downward sloping d. downward sloping; downward sloping
In the Phillips curve equation, which of the following will cause an increase in the current inflation rate?
A) an increase in the expected inflation rate B) a reduction in the unemployment rate C) an increase in the markup, m D) all of the above E) none of the above