In an indifference curve diagram, the quantities of good Y are measured along the vertical axis and the quantities of good X are measured along the horizontal axis. The marginal rate of substitution is defined as
A) how much good Y you must give up to get one more unit of good X.
B) how much good Y you are willing to give up to get one more unit of good X.
C) the relative price of good Y in terms of good X.
D) how much you prefer to substitute good X for good Y.
B
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What is the nature of the trilemma that is encountered when choosing monetary arrangements?
A) Only two of the three aspects of internal and external balance can be accommodated simultaneously. B) Only three of the four aspects of internal and external balance can be accommodated simultaneously. C) Only one of the three aspects of internal and external balance can be accommodated simultaneously. D) Only two of the four aspects of internal and external balance can be accommodated simultaneously. E) Only one of the four aspects of internal and external balance can be accommodated simultaneously.
Assuming initially that the required reserve ratio = 10%, the currency-deposit ratio = 40%, and the excess reserve ratio = 0, a decrease in the required reserve ratio to 5% causes the M1 money multiplier to ________, everything else held constant
A) increase from 2.8 to 3.11 B) decrease from 3.11 to 2.8 C) increase from 2 to 2.22 D) decrease from 2.22 to 2