The money-creation formula is oversimplified because it assumes that
A. every recipient of a bank loan will redeposit the proceeds in another bank.
B. loan recipients will not take any of the proceeds in cash.
C. every bank lends out all excess reserves.
D. All of these responses are correct.
Answer: D
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A) close to B) very different from C) the same as D) completely unrelated to
Increasing returns to scale in production means
A) more than 10% as much of all inputs are required to increase output 10%. B) less than twice as much of all inputs are required to double output. C) more than twice as much of only one input is required to double output. D) isoquants must be linear.
Monopolies have ____ substitutes
A) many B) few C) no D) several but less than 10
If workers and firms expect increases in future prices, it can lead the short run aggregate supply curve to shift left
a. True b. False Indicate whether the statement is true or false