If the required reserve ratio is 20 percent and commercial bankers decide to hold additional excess reserves equal to 5 percent of any newly acquired checkable deposits, then the effective monetary multiplier for the banking system will be:
A. 3
B. 4
C. 5
D. 6
B. 4
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According to the law of increasing costs, as a textile company spends more money to eliminate dust particles from the workplace to increase worker safety
A. the cost of reducing 70 percent of the dust in the factory will be the same as the cost of reducing the first 50 percent of the dust in the factory. B. the cost of reducing 70 percent of the dust in the factory will be less than the cost of reducing the first 50 percent of the dust in the factory. C. the cost of reducing 70 percent of the dust in the factory will be greater than the cost of reducing the first 50 percent of the dust in the factory.
M2 adds together:
A) currency in circulation, checking accounts, savings accounts, travelers' checks, and money market accounts. B) currency in circulation and currency held with foreigners. C) currency in circulation, savings accounts, and held with foreigners. D) currency in circulation, checking accounts, savings accounts, travelers' checks, and currency held with foreigners.
A "buy one, get one for half price" promotion is an example of
A) price discriminating among units of a good. B) price discriminating among groups of buyers. C) a legal monopoly. D) a natural monopoly. E) marketing by a perfectly competitive firm designed to increase the firm's sales.
Most economists consider the case for jawboning to control inflation is strongest when this policy is used:
a. for a long period of time. b. to combat inflation that is out of control. c. to combat cost-push inflation. d. All of these are true.