Gasoline prices in the United States decreased significantly between 2008 and 2009. A decrease in the price of gasoline, holding other things constant, will cause which of the following to occur?
A) increase the demand for gasoline.
B) decrease the demand for gasoline.
C) increase the quantity of gasoline demanded.
D) decrease the quantity of gasoline demanded.
C
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Required reserves for a commercial bank
A) are the minimum reserves that a bank must hold to back its deposits. B) are the reserves that a bank plans to hold in the bank's vault. C) are only the money used by the bank tellers. D) consist only of the bank's deposits at the Fed.
A good economic theory: a. includes every detail that affects the economic behavior of interest
b. relies on simplifying assumptions in order to explain economic behavior. c. does not rely on simplifying assumptions. d. is impossible to achieve because of the difficulty of conducting controlled experiments.