Monetarists argue that the Federal Reserve should allow the money supply to grow:
A. counter to the business cycles.
B. faster than 10 percent annually.
C. only during recessions.
D. at a constant rate.
Answer: D
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If a bank has $1,000,000 in reserves and checking deposits of $3,000,000, what is the bank’s reserve position if the required reserve ratio is 20 percent?
A. The bank has $500,000 of required reserves and $500,000 of excess reserves. B. The bank has $600,000 of required reserves and $400,000 of excess reserves. C. The bank has $400,000 of required reserves and $600,000 of excess reserves. D. The bank has $200,000 of required reserves and $800,000 of excess reserves.
The table shows the aggregate demand and aggregate supply schedule for a hypothetical economy.Real Domestic Output Demanded (in Billions)Price Level (Index Value)Real Domestic Output Supplied (in Billions)$3,000350$9,0004,0003008,0005,0002507,0006,0002006,0007,0001505,0008,0001004,000Refer to the above table. If the quantity of real domestic output demanded increased by $2000 at each price level, the new equilibrium price level and quantity of real domestic output would be:
A. 350 and $8000. B. 300 and $8000. C. 200 and $6000. D. 250 and $7000.
Economists assume that
A) individuals behave in unpredictable ways. B) consumer behavior is explained by the existence of unlimited resources. C) people put other people's interests ahead of their own. D) optimal decisions are made at the margin.
If Synergy Energy Corp. hires attorneys to keep it informed about new regulations, their salaries represent
A. Compliance costs. B. Capital costs. C. Efficiency costs. D. Administrative costs.