When Zane deposits $20,000 cash in his checkable deposit at the Citicorp and the Citicorp's desired reserves increase by $5,000, the desired reserve ratio is
A) 25 percent. B) 75 percent. C) 5 percent. D) 20 percent. E) $5,000.
A
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The market where firms purchase factors of production is referred to as the
a. product market. b. resource market. c. capital market. d. foreign exchange market.
Stable velocity as a contributing factor to successfully using money growth as a stabilizing monetary policy tool, is more important in an environment where:
A. inflation occurs, the problems caused by a variable velocity are just as severe at low levels of inflation as at high levels of inflation. B. inflation is extremely high (e.g., over 100 percent). C. inflation is low (e.g., less than 10 percent). D. there is deflation.
Any imperfection in the market mechanism that prevents optimal outcomes is known as
A. Market failure. B. Government failure. C. Public cost. D. External cost.
Figure 6.3 shows the cost structure of a firm in a perfectly competitive market. If the market price is $3 and the firm shuts down in the short run, its profit is:
A. -$300. B. -$600. C. -$900. D. -$1,200.