If the desired reserve ratio is 7 percent and a bank has $10,000 of deposits, then its desired reserves are
A) $7.
B) $700.
C) $9,300.
D) $930.
E) $7,000.
B
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Suppose that the local hospital claims that the wages of nurses are too high. Yet, the hospital has 10 nursing positions open and no applicants for the jobs. Is the hospital's claim legitimate? Why or why not?
What will be an ideal response?
If the price of Italian shoes imported into the United States increases, then
a. both the GDP deflator and the consumer price index will increase. b. neither the GDP deflator nor the consumer price index will increase. c. the GDP deflator will increase, but the consumer price index will not increase. d. the consumer price index will increase, but the GDP deflator will not increase.
Suppose a perfectly competitive firm can increase its profits by increasing its output. Then it must be true that the firm's:
A. marginal revenue is less than its marginal cost. B. marginal cost exceeds its marginal revenue. C. price exceeds its marginal cost. D. price exceeds its marginal revenue.
Refer to the given information. The expected rate of return curve:
Answer the question on the basis of the following information for a private closed economy. Assume that for the entire business sector of the economy there is $0 worth of investment projects that will yield an expected rate of return of 25 percent or more. But there are $15 worth of investments that will yield an expected rate of return of 20-25 percent; another $15 with an expected rate of return of 15-20 percent; and similarly an additional $15 of investment projects in each successive rate of return range down to and including the 0-5 percent range. A. shows a direct relationship between the interest rate and investment. B. is also the investment demand curve. C. is indeterminate. D. implies a direct (positive) relationship between the interest rate and the level of GDP.