All of the following except one are reasons the demand deposit multiplier may be smaller in practice than in theory. Which one is not a valid reason?
a. Banks do not want to hold excess reserves.
b. Some of the currency generated when bonds are purchased ends up outside of the banking system.
c. Banks sometimes hold more than their required reserves.
d. An open market operation may change the public's holding of cash.
e. All of the above are not valid reasons.
A
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The cartel model of oligopoly assumes that firms jointly behave as a monopolist in order to maximize joint profits.
Answer the following statement true (T) or false (F)
It is spring, and several graduates of State U are seeking employment. State U graduates have evenly distributed GPAs, from 2.0 to 4.0, with an average GPA of 3.0. The largest employer in town, Acme Dynamite, is interviewing candidates, hoping to hire a few hard workers. While Acme does not require students to submit a transcript with their applications, the hiring officer believes that high GPAs signal a willingness to work hard. Suppose that all State U students have the same academic ability when they enter college and do not learn anything in college that will be useful to them while working at Acme. Students differ only in their willingness to work hard and study for their classes. In this case:
A. Acme will not care about a student's GPAs because all students enter college with the same academic ability. B. Acme will not care about a student's GPAs because the students at State U don't learn anything useful in their classes. C. Acme will use a student's GPA as a signal of the student's willingness to work hard. D. there is no benefit to studying hard in college.
Calculate the firm's total profit.
Given the information in Figure 9.7, dissaving would occur at all income levels below
A. $300 billion per year. B. $200 billion per year. C. $150 billion per year. D. $100 billion per year.