If the banking system's money multiplier is 4, then a $2,000 increase in checkable deposits when banks hold excess reserves will result in which of the following events?
a. The money supply will decrease
b. The money supply will not change.
c. The money supply will increase by exactly $8,000.
d. The money supply will increase by more than $8,000.
e. The money supply will increase by less than $8,000.
e
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Refer to Scenario 15.5. If Catherine stopped smoking, then what is the total amount that Catherine will save on life insurance premiums over the rest of her expected lifespan?
A) $700 B) $14,000 C) $30,000 D) $42,000 E) $56,000
Consider a housing development built near an existing airport. After the houses are occupied, homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited. Is the airport a negative externality?
A) No, the airport was there first. B) No, if the original property values reflect the costs imposed by the airport. C) No, airports are government entities and therefore don't impose costs on individuals. D) Yes, the airport's noise should be curtailed for the well-being of the homeowners.