The money multiplier will be smaller when:
A. bank customers prefer to hold a bigger amount of their money as cash (instead of in their checking account).
B. banks prefer to lend out 9 percent of their excess reserves instead of 90 percent.
C. when the marginal propensity to save declines.
D. when the reserve ratio decreases.
Answer: A
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The most important source of foreign exchange earnings to offset the colonial deficit with England was
a. insurance charges and merchant commissions. b. the sale of ships. c. the sale of colonial shipping services. d. inflows of sterling from British forces stationed in the colonies.
Which of the following can be a solution to the lemons problem?
a. Providing testimonials from previous buyers. b. Providing accessories to be used in the car. c. Providing discount on the purchase of a car. d. Providing a warranty that covers the costs of certain repairs.
In the used car market, there is imperfect information when the seller knows that the car overheats after 30 minutes, but the buyer does not.
Answer the following statement true (T) or false (F)