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Question
Explain how the currency drain ratio affects the size of the money multiplier. In your explanation, suppose that in one round of the money creation process a bank gains $1 million in new deposits and reserves. Further suppose that the desired reserve ratio is 10 percent and the currency drain ratio is 50 percent.Answer
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Related questions
Q:
Scarcity results from the fact that
A) people's wants exceed the resources available to satisfy them.
B) not all goals are desirable.
C) we cannot answer the major economic questions.
D) choices made in self-interest are not always in the social interest.
E) the population keeps growing.
Q:
Why does scarcity lead to the what, how, and for whom questions?
Q:
Choices that are best for the society as a whole are choices in pursuit of
A) answering the "how" question.
B) the social interest.
C) self-interest.
D) incentives.
E) answering the "for whom" question.
Q:
Canada has nationalized health care, so that everyone, regardless of their ability to pay, has some access to health care. Based on this observation, Canada has decided that "everyone, regardless of their ability to pay" is the answer to what microeconomic question?
A) What type of health care will be produced and in what quantity?
B) How will health care be produced?
C) For whom will health care be produced?
D) Why will we offer health care?
E) Must we offer health care?
Q:
In the figure above, what is the slope of the curve at point A?A) 0.75B) -0.75C) 1.33D) -1.33E) zero
Q:
When unskilled teens earn less than college graduates, society answers the ________ question.
A) how
B) what
C) for whom
D) why
E) social interest versus self-interest
Q:
When the federal government decides to pay senators more than it pays soldiers, it answers the ________ question.
A) why
B) how
C) for whom
D) what
E) where
Q:
The figure above shows the relationship between the journey length and the cost of trip per mile. The curve becomes flatter because as the journey length increases,A) the fall in the cost per mile becomes smaller.B) the fall in the cost per mile becomes greater.C) the cost per mile decreases.D) the cost per mile increases.E) the cost per mile remains unchanged.
Q:
Of the three major economic questions, which of the following is the best example of a "How?" question?
A) Should we produce more heavy fleece coats?
B) Should we collect tolls on turnpikes using human toll collectors or mechanized toll machines?
C) Should we build log homes or build factories from bricks?
D) Should we spend more on health care?
E) Should we eat more oatmeal?
Q:
The relationship between distance traveled in five hours and speed shown in the figure above isA) positive.B) negative.C) inverse.D) cross-sectional.E) multilateral.
Q:
Nathan drinks three cups of coffee per day. The marginal benefit that he enjoys from drinking the third cup isA) less than the marginal benefit that he receives from drinking the second cup.B) the same as the total benefit from drinking all three cups minus the total benefit of drinking the first two cups.C) both A and B.D) greater than the marginal benefit that he receives from drinking the second cup.E) none of the above.
Q:
When a home builder decides to computerize all of its production schedules, it directly answers the ________ question.
A) for whom
B) what
C) where
D) how
E) why
Q:
In New York City, when he was the mayor Michael Bloomberg recommend that the city, with the help of private donors, make cash payments to poor and underprivileged parents who can certify that their children are attending school on a regular basis. The payments would start after third grade and go through high school, rising each year as dropout rates get higher and a child's forgone earning potential is higher. What economic concept does this policy represent?
A) public goods
B) technological progress
C) externalities
D) the "invisible hand"
E) incentives
Q:
When Delta decides to quit flying to Lithuania, it directly answers the ________ question.
A) what
B) why
C) for whom
D) how
E) when
Q:
Which of the following scenarios describes an action that is NOT rational from an economic point of view?
A) After drinking one martini (shaken, not stirred), James buys and drinks a second martini even though the marginal benefit of the second martini is lower than the marginal benefit of the first.
B) Eric buys a replacement ticket to the basketball game after he realizes that he accidentally left his original ticket at home.
C) Emily chooses to attend a social event on Tuesday night instead of studying even though she has an important exam on Wednesday morning.
D) US Airways sells a last minute ticket to Don for $50 even though its average cost per passenger is $250.
E) None of the above
Q:
When you make the decision to spend your time attending class, which economic question are you answering?
A) What?
B) How?
C) For whom?
D) Why?
E) Is this in the social interest?
Q:
Which of the following is a topic studied in macroeconomics?
A) the pricing decisions in the computer hardware industry
B) the effect on economic growth if the government raises taxes
C) how the wheat industry determines how much wheat to grow
D) the impact of labor unions on wages
E) the impact of higher prices for gasoline on the number of SUVs people buy
Q:
Which of the following BEST describes macroeconomics?
A) It analyzes the aggregate effects on the national economy of the choices made by individuals, firms, and governments.
B) It studies the choices that individuals and businesses make when coping with scarcity.
C) It examines how the choices that individuals affect governments.
D) It is not a social science because its predictions cannot be tested.
E) Proving causation is never a problem for macroeconomics.
Q:
Which of the following is a microeconomic topic?
i. K-Mart's decision to close stores that are not making a profit
ii. Home Depot's choice to hire more full-time employees because its sales increased
iii. Delta Airlines changes its fares.
A) i only
B) ii only
C) i and iii
D) ii and iii
E) i, ii, and iii
Q:
In the figure above, an increase in z leads to aA) movement up along one of the lines showing the relationship between x and y.B) movement down along one of the lines showing the relationship between x and y.C) rightward shift of the line showing the relationship between x and y.D) leftward shift of the line showing the relationship between x and y.E) trend change in both x and y.
Q:
The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sellA) no peanuts.B) 1000 pounds of peanuts.C) 2000 pounds of peanuts.D) 4000 pounds of peanuts.E) more than 4000 pounds of peanuts.
Q:
If a small change in the x variable results in a large change in the y variable, the curve will be
A) positively sloped.
B) negatively sloped.
C) steep.
D) flat.
E) trended.
Q:
The slope of a line equals the change in the variable measured along the
A) x-axis divided by the change in the variable measured along the y-axis.
B) y-axis divided by the change in the variable measured along the x-axis.
C) x-axis minus the change in the variable measured along the y-axis.
D) x-axis multiplied by the change in the variable measured along the y-axis.
E) y-axis minus the change in the variable measured along the x-axis.
Q:
The graph shows aA) positive relationship that becomes less steep.B) negative relationship that is linear.C) positive relationship that is linear.D) negative relationship that become less steep.E) None of the above answers is correct.
Q:
In the figure above, the relationship between the x variable and the y variableA) is positive.B) is negative.C) starts by being positive and then becomes negative.D) starts by being negative and then becomes positive.E) is non-existent because the two variables are unrelated.
Q:
In the diagram above, which figure(s) show(s) a direct relationship between the variables?A) both B and CB) both A and CC) only AD) only DE) only B
Q:
In the above figure, a negative relationship between x and y is shown in FigureA) A.B) B.C) C.D) D.E) B and Figure C.
Q:
In the above figure, as the y variable increases,A) the x variable is constant.B) the x variable increases.C) the x variable decreases.D) the x variable at first increases but then decreases.E) the x variable probably changes, but more information is needed to determine if it increases, decreases, or stays the same.
Q:
Matt pays a $50 a month membership fee at Bruno's Gym. He can exercise at the gym as many times as he wishes. If the membership fee is measured along the vertical axis and the number of times he exercises is measured along the horizontal axis, the graph between his membership fee and the number of times he exercises willA) be a horizontal line.B) be positively sloped.C) be negatively sloped.D) be a vertical line.E) start out positively sloped and then, as Matt loses interest, become negatively sloped.
Q:
An independent relationship between two variables is shown in a graph by
A) an upward-sloping line.
B) a horizontal or a vertical line.
C) a downward-sloping line.
D) a steeply sloped line.
E) any straight line curve.