Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages. If the government offers subsidies for MBAs, then which of the following statements is correct?
a. The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs.
b. The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAs.
c. The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs.
d. There is not enough information to answer the question.
b
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The multiplier equals
A) consumption/real disposable income. B) change in consumption/change in real disposable income. C) 1/MPC. D) 1/(1 - MPC).
Imagine that Wingate National is a new bank, and that the legal reserve requirement is 10 percent. If it accepts a $1,000 deposit, then it alone can increase the money supply by
a. $900 b. $910 c. $1,000 d. $9,000 e. $10,000
LTV ratio appears to be positively related to
A) bond price. B) stock price. C) housing price. D) none of the above E) all of the above
Which exchange rate system requires an immediate response by a government to counter all market forces on exchange rates?
A. The floating exchange rate system B. The fixed exchange rate system C. The managed float exchange rate system D. The Bretton-Woods exchange rate system