Ricardo buys cola and popcorn. Cola sells for $0.50 a can and popcorn sells for $1 per bag. He is in consumer equilibrium. The price of a cola jumps to $1 per can. In his new consumer equilibrium, Ricardo's
A) marginal utility of cola will be equal to his marginal utility of popcorn.
B) marginal utility per dollar spent will be 2.
C) total utility will be higher.
D) marginal utility of cola will decrease.
A
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An expansionary monetary policy results in lower interest rates, which in turn
A) reduces the international price of the dollar and increases net exports. B) increases the foreign demand for U.S. financial instruments, lowering the international price of the dollar and decreasing net exports. C) reduces the foreign demand for U.S. financial instruments and reduce net exports. D) increases foreign demand for U.S. financial instruments, raising the international price of the dollar and reducing net exports.
If the reserve ratio is 12.5 percent, then $2,000 of additional reserves can create up to
a. $8,000 of new money. b. $16,000 of new money. c. $32,000 of new money. d. None of the above is correct.