If the reserve ratio is 7.5 percent, the money multiplier is
a. 7.5.
b. 10.3.
c. 13.3.
d. 11.3.
c
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A system for studying strategic behavior in economics is called
a. decision science. b. political economy. c. game theory. d. solution concepts.
The towns of Jekyll and Hyde each have a labor force of 2,000 people. In Jekyll, 500 people were unemployed for the entire year, while the rest of the labor force was employed continuously. In Hyde, every member of the labor force was unemployed for three months and was employed for nine months. The average duration of unemployment spells over the year was ________ months in Jekyll and ________ months in Hyde.
A. 3; 9 B. 12; 3 C. 3; 3 D. 12; 9
Assume that the U.S. interest rate is 5%, the European interest rate is 2%, and the future expected exchange rate in one year is $1.224. If the spot rate is $1.24, then the expected dollar return on euro deposits is:
a. 4% b. 7.1% c. 0.71% d. 0.129%
Farmer Brown sells her wheat in a perfectly competitive market. Suppose the current market price of wheat is $2.50 per bushel.
A. Farmer Brown can sell as much wheat as she likes at $2.50 per bushel. B. Farmer Brown can charge any price for her wheat, but will maximize profit if she sells for less than $2.50. C. Farmer Brown should charge more than $2.50. D. Farmer Brown can charge more than $2.50 and still sell some wheat.