Zero pollution represents an efficiency standard.

Zero pollution represents an efficiency standard.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a 10,000 injection of new reserves by the Fed can create:
 a. 2,000 in new checkable deposits.
 b. 10,000 in new checkable deposits.
  c. 50,000 in new checkable deposits.
  d. 500,000 in new checkable deposits.
  e. 5,000 in cash.

QUESTION 3

If households save 40 billion less at each level of income and the marginal propensity to consume (MPC) is 0.8, the aggregate expenditure line will _____.
 a. intersect the 45-degree line at a real GDP of 40 billion
 b. shift upward by 40 billion
 c. shift downward by 40 billion
 d. shift upward by 200 billion because of the multiplier mechanism
  e. shift downward by 200 billion because of the multiplier mechanism

QUESTION 4

A totally pollution free environment should be a primary social goal.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 5

If each bank in the United States had to keep 100 percent of checkable deposits as reserves, each 1 the Fed injected into new reserves could increase the money supply by:
 a. 1.
 b. 2.
 c. 100.
 d. 5.
 e. a penny.