Which is FALSE about perfect competition?
A) There are numerous sellers.
B) Market entry and exit is unrestricted.
C) There is no ability to set price.
D) There is considerable product differentiation.
Answer: D
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In the simple deposit expansion model, if the banking system has excess reserves of $75, and the required reserve ratio is 20%, the potential expansion of checkable deposits is
A) $75. B) $750. C) $37.50. D) $375.
The goal of expansionary fiscal policy with respect to output is to:
A. increase spending and aggregate demand to get back to an output level the government is comfortable with. B. decrease government spending in an attempt to get the private economy back on track. C. increase spending and shift aggregate demand to the left in an effort to reach full employment output. D. increase spending and shift aggregate demand to the right in an effort to reach full employment output.