On a diagram where the interest rate and the quantity of money demanded are shown on the vertical and horizontal axes respectively, the asset demand for money can be represented by:
A. a line parallel to the horizontal axis.
B. a vertical line.
C. a downsloping line or curve from left to right.
D. an upsloping line or curve from left to right.
C. a downsloping line or curve from left to right.
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When real GDP grows more slowly than potential GDP,
a. nominal GDP rises. b. the unemployment rate falls. c. labor productivity falls. d. the unemployment rate rises.
“In the last four months, GDP has been declining and many sectors have shown a contraction in business activity. Still, employment has remained constant. We are currently in a recession.” Evaluate this statement.
What will be an ideal response?
Refer to the graph shown. If the price of this product fell from $10 to $8, producer surplus would fall from:
A. 250 to 180. B. 1,000 to 540. C. 750 to 270. D. 750 to 540.
What is the maximum amount a bank can lend?
A) its total reserves B) its excess reserves C) its excess reserves divided by the required reserve ratio D) the value of its checkable deposits times the required reserve ratio