As the IS curve becomes flatter, we know that
A) a given change in the money supply will cause a larger change in output.
B) a given change in the money supply will cause a smaller change in output.
C) a given change in the money supply will cause the same change in output.
D) monetary policy becomes less effective.
B
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Runs on banks occur when
A) banks keep 100 percent of their deposits on hand. B) depositors are confident that the bank will not go bankrupt. C) banks make an unusually high number of profitable loans. D) many depositors attempt to withdraw their funds simultaneously.
A monopsony will hire another worker if the
A) marginal cost of labor exceeds the value of marginal product. B) marginal cost of labor is less than the value of marginal product. C) marginal cost of labor is less than the wage rate. D) wage rate exceeds the value of marginal product.