If a fear of increased bankruptcies of firms causes banks to increase their reserve to deposit ratio, then
a. the money supply and money multiplier will rise.
b. the monetary base and the money multiplier will fall.
c. there will be no change in the money multiplier, but the money supply will fall.
d. the money multiplier and the money supply will fall.
D
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Suppose the government has declared beer to be an illegal substance and imposes a fine on any person caught selling a beer. Buying beer, however, remains legal
Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A) $5 per quart and 300 quarts of beer B) $3 per quart and 500 quarts of beer C) $3 per quart and 100 quarts of beer D) $1 per quart and 300 quarts of beer
Which of the following has been confirmed by empirical tests of the Ricardian model?
A) All predictions of the model for a multi-product, multi-country world are highly unrealistic. B) The existence of nontraded goods results in a high degree of specialization among countries. C) International trade has no impact on income distribution. D) The unimportance of economies of scale as a cause of trade. E) Companies tend to export goods in which they have a relatively high level of productivity.