The marginal revenue product (MRP) of land declines as more land is brought into production because:
A. land is a "free and nonreproducible gift of nature."
B. of diminishing returns.
C. land rent has no incentive function.
D. the supply of land is fixed.
Answer: B
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Why does the Federal Reserve alter monetary policy?
(A) To provide services to member banks. (B) To enable banks to clear checks. (C) To lessen the effect of natural business cycles. (D) To regulate the banking industry.
The simple deposit multiplier can be expressed as the ratio of the
A) change in reserves in the banking system divided by the change in deposits. B) change in deposits divided by the change in reserves in the banking system. C) required reserve ratio divided by the change in reserves in the banking system. D) change in deposits divided by the required reserve ratio.