Suppose the money multiplier is 5. If banks hold excess reserves, the required reserve ratio must:
A. equal 0.20.
B. be less than 0.10.
C. be greater than 0.20.
D. be less than 0.20.
Answer: D
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Bilateral monopoly exists when
A) a single buyer confronts a single seller. B) there are two monopolistic buyers trying to buy resources. C) two labor unions are trying to represent the same group of workers. D) a firm is both a monopoly in its output market and a monopsonist in its input market.
The primary purpose of the aggregate demand and aggregate supply model is to demonstrate the classical dichotomy
a. True b. False Indicate whether the statement is true or false
The price of a stock will decrease, ceteris paribus, for all of the following reasons except
A. The demand for the stock decreases. B. The supply of the stock increases. C. Consumer confidence increases. D. There is a surplus of the stock at the current price.
Bonds ________ and stocks ________
A) have a fixed number of interest payments; have a fixed number of dividend payments B) have a fixed number of interest payments; may pay dividends forever C) may pay interest payments forever; have a fixed number of dividend payments D) always pay interest payments forever; always pay dividends forever