Refer to the given balance sheets and assume the reserve ratio is 25 percent. Suppose the Federal Reserve Banks buy $2 in securities from the public, which deposits this amount into checking accounts. As a result of these transactions, the supply of money will:
A. be unaffected, but the money-creating potential of the commercial banking system will
increase by $6.
B. directly decrease by $2 and the money-creating potential of the commercial banking
system will be unaffected.
C. directly increase by $8 and the money-creating potential of the commercial banking system
will increase by an additional $32.
D. directly increase by $2 and the money-creating potential of the commercial banking system
will increase by an additional $6.
D. directly increase by $2 and the money-creating potential of the commercial banking system
will increase by an additional $6.
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The authors explain that a firm earning a zero economic profit in the long run has earned a competitive return on their investment. What do they mean by "competitive" return in this context?
A) The firm's return could only be earned under perfect competition and would be smaller under imperfect competition. B) The firm's return is at least as larger as the returns earned by other firms. C) The firm's return is at least as larger as could be earned in another investment. D) The firm's return is negative, which initiates stronger competition among firms in the market.
Given the data in the above table, income of $13, a price of $1 for a bottle of water and $2 for a hamburger, what is the marginal utility per dollar spent on water and on hamburgers when the consumer is in consumer equilibrium?
A) 20 units of utility per dollar spent B) 10 units of utility per dollar spent C) 5 units of utility per dollar spent D) 1 unit of utility per dollar spent
Which of the following statements is TRUE?
A) The 1957 Treaty of Rome founded the EU and created a custom union. B) The 1957 Treaty of Rome founded the EU. C) The 1957 Treaty of Rome founded the euro. D) The 1957 Treaty of Rome founded the European Central Bank. E) The 1957 Treaty of Rome founded the Stability and Growth Pact. known as SGP.
A major attraction of the flat tax is its simplicity.
Answer the following statement true (T) or false (F)