Free riding would be an appropriate description of which of the following behaviors?
a. People who enjoy having nature conserved by The Nature Conservancy but who do not contribute to the organization.
b. People crowding into a public park on a nice summer day.
c. A fisher putting a more powerful motor on her boat so as to get to the fishing grounds before others.
d. Computer software developers who do not charge for their finished programs.
a. People who enjoy having nature conserved by The Nature Conservancy but who do not contribute to the organization.
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Answer the following statements true (T) or false (F)
1. When bank loans are repaid and the banks hold on to the funds as additional reserves, then the banking system's ability to "create" money decreases. 2. The monetary multiplier can also be called the spending multiplier. 3. The maximum deposit creation that can be made in the banking system is equal to the excess reserves divided by the required reserve ratio. 4. If the banking system has $20 billion in excess reserves and if the reserve ratio is 10 percent, the system can increase its loans by a maximum of $22 billion. 5. If a commercial banking system has $200,000 in checkable deposits and actual reserves of $70,000, then with a reserve ratio of 20 percent the banking system can expand the supply of money by a maximum of $180,000.
Refer to the above data. Gross investment is $8 billion, net exports are $4 billion, and government collects a lump-sum tax of $30 billion and spends $30 billion. Assume all taxes are personal taxes and that government spending does not entail shifts in the consumption and investment schedules. The equilibrium GDP will be:
A. $280 billion
B. $290 billion
C. $300 billion
D. $310 billion