An increase in the real interest rate ________ the quantity of loanable funds supplied and ________ the quantity of loanable funds demanded
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
B
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The number of dollars that the commercial banking system can add to the money supply for each dollar of new reserves created by the Fed
A) cannot legally be greater than 8 nor less than 2. B) is governed largely by reserve requirements and the form in which the public chooses to hold money. C) is less than one because a portion of new reserves must be retained in bank vaults or on deposit with the Fed. D) would increase if the public decided to transfer the amounts currently in commercial bank savings accounts into checking accounts.
Real GDP =________ where the price level is the ________
A) Nominal GDP × Price level; GDP deflator B) Nominal GDP ÷ Price level; GDP deflator C) Nominal GDP ÷ Price level; CPI D) Nominal GDP × Price level; CPI E) none of the above
By providing free garbage removal, a community
a. discourages activities that produce detrimental externalities. b. encourages citizens to recycle items rather than throw them out. c. leads citizens to throw out more garbage than is socially optimal. d. None of the above is correct.
David has just ordered a smartphone only to be told that he will have to wait one month for it to be delivered. Which of the following statements is TRUE?
A. The smartphone is human capital. B. The smartphone is an economic good. C. The smartphone is an intangible good. D. The smartphone is not a scarce good.