The inflation rate for the economy as a whole is a
a. normative value judgment
b. positive value judgment
c. macroeconomic statistic
d. microeconomic statistic
e. critical assumption
C
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The shape of the costs curves may be traced back to
A) the law of diminishing marginal utility. B) the difference between the short run and the long run. C) the law of diminishing marginal returns. D) the fact that all production occurs in the long run.
Assume the commercial banking system has checkable deposits of $20 billion and excess reserves of $2 billion when the reserve ratio is 25 percent. If the reserve ratio is then lowered to 20 percent, we can conclude that the:
A. Banking system now has excess reserves of $3 billion B. Monetary multiplier has decreased C. Maximum money-creating potential of the banking system has been increased by $7 billion D. Fed has decided that money supply needed to be reduced