The percentage of a change in income that is spent domestically is:
a. the sum of the MPC and the MPI.
b. the sum of the MPC and the MPS.
c. the difference between the MPC and the MPI.
d. the product of the MPC and the MPI.
e. the sum of the MPS and the MPI.
c
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If the actual reserve/deposit ratio equals 15% and the desired reserve/deposit ratio for this bank is 10%, the bank should:
A. stop making loans. B. make more loans in order to earn interest. C. do nothing because this is a profitable situation. D. request that customers withdraw deposits from the bank.
According to the quantity theory of money, a decision on the part of all business firms currently paying employees on a monthly basis to begin paying on a weekly basis would be expected to
a. increase velocity and increase nominal GDP. b. increase velocity and decrease nominal GDP. c. decrease velocity and increase nominal GDP. d. decrease velocity and decrease nominal GDP.
The law of supply and the law of demand both rely on the concept of opportunity cost.
Answer the following statement true (T) or false (F)
The invisible hand promotes society's interests because:
A. individuals pursuing their self-interest will try to produce goods and services that people in society want and are willing to purchase. B. individuals will produce goods for others out of concern for their fellow human beings. C. it makes sure that everyone wins from competition in the market. D. government regulation pushes business into producing the right mix of goods and services.