If $500 of new reserves generates $1000 of new money in the economy, then the money multiplier is
a. 2 and the reserve ratio is 50 percent.
b. 2 and the reserve ratio is 2 percent
c. 0.5 and the reserve ratio is 50 percent.
d. 0.5 and the reserve ratio is 2 percent.
a
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A reason why a firm's demand for labor curve slopes downward is that, holding everything else constant,
A) the extra cost of hiring additional units of labor increases as a firm hires more units of labor. B) as more labor is hired, labor's marginal product falls due to diminishing marginal returns. C) the firm's demand curve for the product produced by the labor is downward sloping. D) each additional unit of labor hired is less efficient than previously hired units.
An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.
A. TVs; radios B. radios; TVs C. TVs; TVs D. radios; both goods
The following table depicts the cost and demand structure a natural monopoly faces. Provided that the firm operates as a monopolist, what is the price charged and quantity produced in order to maximize profits?
A. price charged of $800 and quantity produced of 2 B. price charged of $900 and quantity produced of 1 C. price charged of $600 and quantity produced of 4 D. price charged of $700 and quantity produced of 3
Which of the following is a liability to a bank?
A) total reserves B) transaction deposits C) government securities D) loans