What is the money multiplier and what affects its size?
What will be an ideal response?
The money multiplier is the amount by which a change in the monetary base is multiplied to determine the change in the quantity of money. The money multiplier is greater than 1.0. Its size is affected by the desired reserve ratio and the currency drain. The higher the desired reserve ratio and/or the larger the currency drain, the smaller the money multiplier.
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According to the intertemporal substitution effect, a higher price level
A) decreases the quantity of real GDP demanded. B) lowers the costs of building new plants and equipment. C) increases the quantity of real GDP demanded. D) makes it less costly for people to buy houses and cars.
Pollutants are not harmful if they are degradable in water
Indicate whether the statement is true or false
Which of the following is not a criticism of flexible exchange rates?
a. All of the following. b. They are volatile, which increases risks for importers and exporters. c. They could affect employment and increase demand for trade restrictions. d. They do not allow for discretionary monetary policy. e. They allow central banks to follow expansionary monetary policies.
All other factors held constant, if the price of game consoles rise, the demand for gaming titles will
a. shift to the left, because they are normally used together. b. remain constant. c. shift to the right, because they are normally used together. d. shift to the right, because they are substitutes.