Suppose that the Fed purchases $1,000,000 worth of bonds and that the reserve ratio is 25 percent. Then, the maximum potential expansion of deposits is
A) $4,000,000. B) $400,000. C) $25,000,000. D) $10,000,000.
A
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Which of the following is NOT true of the yield curve for U.S. Treasury securities?
A) Typically, it slopes upward. B) It depicts the relationship among yields on securities of different maturities. C) Typically, it shifts up or down rather than twists. D) Typically, it slopes downward.
If Jennifer withdraws $750 from her savings account and deposits it in her checking account, then M1 will ________ and M2 will ________
A) increase; increase B) increase; decrease C) increase; not change D) not change; decrease
If the demand curve shifts but the supply curve does not and price remains the same, supply must be perfectly inelastic
a. True b. False
At the unique point of consumer equilibrium, the:
a. distance between indifference curves is maximum. b. distance between the budget line and the indifference curve is maximum. c. marginal utility ratio of the two goods is equal. d. marginal rate of substitution (MRS) equals the slope of the budget line.