If your bank receives a checkable deposit of 20,000 cash, and the banking system makes loans totaling 60,000 . the maximum possible, then the money multiplier must be:
a. 2.
b. 2.5.
c. 3.
d. 3.5.
e. 4.
QUESTION 2Which of the following is not an example of a country's infrastructure?
a. Transportation system.
b. Communications system.
c. Political system.
d. Educational system.
e. Energy system.
QUESTION 3Suppose that the economy is in a position of short-run equilibrium at a point where real GDP is below the full-employment level. Assuming no further change in aggregate demand and self-correction, the movement to a new long-run equilibrium includes a decrease in which of the following?
a. The unemployment rate.
b. The price level (CPI).
c. The level of nominal wages and salaries.
d. All of the above.
QUESTION 4If banks are fully loaned up, have no excess reserves, and the required reserve ratio is raised, the amount that banks can lend is:
a. reduced and the money supply contracts.
b. reduced and the money supply expands.
c. reduced and there is no change in the money supply.
d. increased and the money supply expands.
e. increased and the money supply contracts.
QUESTION 5Which of the following is infrastructure?
a. Police.
b. Training and education.
c. Highways.
d. All of the above.
e. None of the above.
QUESTION 6Beginning from a position of long-run equilibrium, suppose there is an increase in the aggregate demand curve. After adjustment and comparing the economy's new long-run equilibrium with its original long-run position, the result would be an increase in:
a. real GDP.
b. the price level (CPI).
c. the unemployment rate.
d. a and b, but not c.
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