A critical assumption in the classical model is that markets are always clear
a. True
b. False
B
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Crucial assertions in the menu-cost literature are that those costs ________ be large for them to have an effect on firms' pricing, while potential total welfare losses ________ menu costs that have been avoided
A) need not, may be several times larger than B) need not, are generally much less than C) must, may be several times larger than D) must, are generally much less than
Assume that full-employment real GDP is Y = $1,200 billion, the current equilibrium real GDP is Y = $1,600 billion, and the MPC = 0.8 . In order to bring the economy to a full-employment real GDP,
a. a recessionary gap must be bridged by increasing aggregate expenditures by $80 billion. b. an inflationary gap must be bridged by cutting aggregate expenditures by $80 billion. c. nothing is needed to bring the economy into full employment equilibrium. d. a recessionary gap must be bridged by increasing aggregate expenditures by $400 billion. e. an inflationary gap must be bridged by cutting aggregate expenditures by $400 billion.
A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 10 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
a. $200,000; $200,000 b. $200,000; $2,000,000 c. $300,000; $300,000 d. $300,000; $3,000,000
Which of the following is not potentially a barrier to entry into the widget market?
A. Patent protection on the design of widgets B. High prices for widgets C. Government licensing of widget producers D. Massive advertising by existing widget producers