If the Federal Reserve increases the legal reserve requirement on deposits,
a. the money stock will rise and the money multiplier will fall.
b. the monetary base will rise and the money multiplier will fall.
c. both the monetary base and the money stock will fall.
d. neither the monetary base nor the money stock will rise.
C
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A current account deficit can occur if ________, all else equal
A) net national savings equals zero B) net factor income from abroad equals zero C) net exports are negative D) net investment income is negative
Jonah lives in a small town where there is only one Mexican restaurant. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?
A) Demand is likely to be perfectly elastic. B) Demand is likely to be relatively elastic. C) Demand is likely to be relatively inelastic. D) Demand is likely to be perfectly inelastic.