Fire protection is a
a. club good, because it is excludable but not rival in consumption.
b. club good, because it is rival in consumption but not excludable.
c. a public good, because it is excludable but not rival in consumption.
d. a public good, because it is rival in consumption but not excludable.
a
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Suppose the money supply grows at an annual rate of 10%, real GDP grows at 4%, the growth rate of velocity is 0%, and the expected real interest rate on Aaa corporate bonds averages 5.5%
Use the Fisher equation to determine the nominal interest rate on Aaa bonds. What will happen to the nominal interest rate in the long run if the growth rate of the money supply decreases to 7%?
If the money supply is $200 million, the reserve requirement is 20%, and currency holding $10 million, then reserves are
a. $10 million. b. $40 million. c. $30 million. d. $40 million. e. none of the above