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Question
After the Federal Reserve increases reserves in the banking system, banks create new deposits through multiple rounds of lending and accepting deposits until the:A. Federal Reserve requires them to stop.
B. deposit insurance limit is reached.
C. actual reserve/deposit ratio is greater than the desired reserve/deposit ratio.
D. actual reserve/deposit ratio is equal to the desired reserve/deposit ratio.
Answer
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Related questions
Q:
Slower real wage growth in the U.S. since the 1970s accompanied by rapid job growth, can be explained by: A. skill-biased technological change.
B. globalization.
C. a productivity slowdown accompanied by an increase in the labor supply.
D. a productivity slowdown accompanied by a decrease in the labor supply.
Q:
A measurement in terms of current dollar value is called a(n) ______ quantity. A. nominal
B. real
C. deflated
D. indexed
Q:
A good or service that is rival but nonexcludable is called a ______, and a good or service that is nonrival but excludable is called a ______. A. public good; private good
B. commons good; public good
C. commons good; collective good
D. public good; collective good
Q:
Which of the following items is an example of a good that is nonrival but excludable? A. Pay-per-view movies.
B. Corn.
C. National defense.
D. Broadcast television.
Q:
National defense is an example of a good that is: A. neither nonrival nor nonexcludable.
B. largely nonrival and nonexcludable.
C. only nonexcludable.
D. only nonrival
Q:
If it is difficult, or costly, to prevent people who do not pay for a good from consuming the good, then the good is a ______ good. A. nonexcludable
B. pure public
C. private
D. nonrival
Q:
If a good can be consumed by one person without reducing its availability to others, then it is a ______ good. A. nonexcludable
B. pure public
C. common
D. nonrival
Q:
MegaCable and Acme are competing for an exclusive contract to provide the city of Dustin with cable television for the next year. The firm that wins the contract will earn an economic profit of $5 million. The contact will be awarded to the firm that spends the most on lobbying. If both firms spend the same amount on lobbying, then the winner will be determined by a coin flip, so each will have a 50 percent chance of winning. The socially optimal amount for each firm to spend on lobbying is ______. A. $0
B. $2,500,000
C. $5,000,000
D. $10,000,000
Q:
One justification for the creation of a federal level of government is:A. the ability to deficit spend.B. economies of scale in the provision of military defense.C. to encourage local diversity in the types of public goods provided.D. greater responsiveness to the will of the voters.
Q:
The government subsidizes education because: A. it is a pure public good.
B. private firms will not provide education.
C. the government can provide a better education than can private firms.
D. education is thought to have positive externalities.
Q:
The problems of externalities and poorly formed property rights are: A. minor in modern economies.
B. among several rationales for the existence of government.
C. better solved by private rather than government action.
D. the only two legitimate reasons for creating government.
Q:
The development of pay-per-view technology:A. converted a collective good into a private good.B. allows consumers to see movies that were previously unavailable for several years.C. converted a pure public good into a collective good.D. has made all consumers worse off.
Q:
Suppose a study that finds that the income elasticity of demand for a public good is greater than 1. This implies that the public good should be financed through a ______ income tax system. A. collective
B. regressive
C. proportional
D. progressive
Q:
Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority.ResidentReservation PriceIncomeKris$100$1,000Taylor$200$5,000Max$700$6,000If the government proposes to pay for the public good with a proportional income tax of 8 percent, then:A. all three voters will vote in favor of the tax.B. Max and Taylor will vote against the tax, but Kris will vote in favor of it.C. Kris and Max will vote in favor of the tax, but Taylor will vote against it.D. all three voters will vote against the tax.
Q:
Josh pays $6,000 in taxes and earns $60,000. Maggie pays $4,000 in taxes. If the tax system is progressive, then Maggie earns: A. $40,000.
B. more than $40,000 but less than $60,000.
C. less than $40,000.
D. more than $60,000.
Q:
The three broad reasons for saving, as identified by economists, relate to: A. consumption, investment, and exports.
B. national, public, and private production.
C. the life-cycle, precaution, and bequests.
D. capital gains, capital losses, and deficits.
Q:
Decentralized market-based financial systems improve the allocation of saving by: A. ensuring capital gains exceed dividend payments.
B. eliminating the need for commercial banks or other financial intermediaries.
C. matching net capital inflows to net capital outflows.
D. providing information and risk-sharing services.
Q:
Suppose that Taylor receives a $10,000 bonus from her employer. If she puts that money toward her mortgage, her wealth would ______; if she puts that money in her checking account, her wealth would ______.
Taylor has the following assets and liabilities: A. increase to $121,000; decrease to $101,000
B. increase to $115,000; decrease to $95,000
C. increase to $121,000; increase to $121,000
D. increase to $115,000; increase to $115,000
Q:
What is the value of Taylor's liabilities?
Taylor has the following assets and liabilities: A. $300,000
B. $303,000
C. $308,000
D. $311,000
Q:
What is the value of Taylor's assets?
Taylor has the following assets and liabilities: A. $308,000
B. $416,000
C. $419,000
D. $422,000
Q:
A decrease in the capital gains tax on income made from new capital investment will: A. shift the demand for investment curve to the left.
B. shift the demand for investment curve to the right.
C. shift the supply of saving curve to the left.
D. shift the supply of saving curve to the right.
Q:
When the coupon rate on newly issued bonds decreases from 6% to 5%, the prices of existing bonds:A. increase.B. decrease.C. remain unchanged.D. decrease only if the coupon rate is less than 5%.
Q:
If the price of TVs produced by XYZ-TV Company falls from $1,000 to $750 per TV set, then the: A. supply of labor to the XYZ-TV Company increases.
B. supply of labor to the XYZ-TV Company decreases.
C. demand for labor by the XYZ-TV Company increases.
D. demand for labor by the XYZ-TV Company decreases.
Q:
The following table provides information about production at the XYZ-TV Company. Number of WorkersTVs ProducedMarginal ProductValue of Marginal Product00------13535$35,00026833$33,00039931$31,000412829$29,000515527$27,000How many workers will XYZ-TV Company hire if the going wage for TV production workers is $32,000?A. 0B. 1C. 2D. 3
Q:
All of the following describe trends in U.S. labor markets except: A. growing wage inequality in the United States in recent decades.
B. a slowdown in real wage growth since the 1970s.
C. substantial growth in the level of employment in the United States since 2000.
D. substantial growth in real ages during the last century..
Q:
If the government needs to raise revenue to pay for a public good, the ideal tax structure would tax A. all citizens by the same amount.
B. all citizens in proportion to their willingness to pay for the public good.
C. all citizens by the same proportion of their income.
D. only citizens who state that they will use the public good.
Q:
Citizens of Tinytown are considering building a new park. If each voter in Tinytown has a reservation price that is less than the total cost of the park, then: A. the benefit of the park is less than the cost of the park, so the park should not be built.
B. some sort of collective action by voters will be necessary to fund the park.
C. a private firm will have an incentive to build the park.
D. the park will never be built.
Q:
One disadvantage of using the government to provide pure public goods is that everyone receives ______ of the public good and has ______ for the public good. A. a different amount; a different reservation price
B. a different amount; the same reservation price
C. the same amount; a different reservation price
D. the same amount; the same reservation price
Q:
Consider a police department trying to decide how to allocate its crime prevention resources between motor vehicle thefts and burglaries. The marginal benefit of one less motor vehicle theft is $20,000, and the marginal benefit of one less burglary is $1,000. Suppose the annual number of motor vehicle thefts and the annual number of burglaries depends on the number of detectives assigned to each type of crime, as shown in the table below. Each detective costs $35,000 each per year, regardless of whether the detective is assigned to motor vehicle thefts or burglaries.Number of detectivesNumber of motor vehicle thefts per yearNumber of burglaries per year0201001166021330311104100Suppose the police department hires 4 detectives and assigns all of them to motor vehicle theft. The marginal benefit of the fourth detective assigned to motor vehicle theft is ______, and the marginal benefit that would have been gained had the detective instead been assigned to burglary is ______.A. $20,000; $40,000B. $40,000; $40,000C. $20,000; $20,000D. $40,000; $20,000
Q:
If the Central Bank of Macroland puts an additional 1,000 dollars of currency into the economy, the public deposits all currency into the banking system, and banks have a desired reserve/deposit ratio of 0.10, then the banks will eventually make new loans totaling ______ and the money supply will increase by _______. A. $1,000; $1,000
B. $9,000; $9,000
C. $9,000; $10,000
D. $1,000; $9,000