If bankers decide to keep a lower fraction of deposits on reserve, the money supply will
A. decrease.
B. increase.
C. remain unchanged.
D. move more quickly through the economy.
Answer: B
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Which of the following is likely to happen when the interest rate falls?
A) The volume of economic activity will reduce. B) The labor demand curve will shift to the left. C) Equilibrium wage rate will fall. D) The labor demand curve will shift to the right.
One reason for the short-run aggregate supply curve (SRAS) is: a. a fixed CPI market basket
b. perfect knowledge of workers. c. fixed-wage contracts. d. the upward-sloping production function.
Which of the following cases established that the mere possession of monopoly power violated antitrust laws?
A. IBM case of 1982 B. Microsoft case of 1998 C. Alcoa case of 1945 D. AT&T case of 1982
Which of the following statements correctly identifies a reason why inflation can be used as a countercyclical policy tool?
A) Inflation sometimes increases the demand for workers that increases output and helps combat slowdowns. B) Inflation reduces money costs and hence stimulates an economy during slowdowns. C) Inflation increases consumer demand which is necessary for combating slowdowns. D) Inflation increases consumer confidence, which is an absolute necessity to counter act business cycles.