The actual money multiplier is smaller than the simple money multiplier because:
a. the actual multiplier affects M2 rather than M1
b. cash withdrawals reduce the amount banks can lend out.
c. the actual multiplier affects the amount of excess reserves each bank holds.
d. the size of the simple multiplier depends on the volume of deposits unlike the actual multiplier.
e. the actual multiplier uses a different measure of reserve requirements.
b
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Assume the managers of the two major firms in an industry agree to set the price of their output at a fixed level so as to discourage new entrants into the market. This would be considered a violation of the:
A) Sherman Act of 1890. B) Clayton Act of 1914. C) Federal Trade Commission Act of 1914. D) Celler-Kefauver Act of 1950.
If something is a medium of exchange, then it:
a. serves as a yardstick for measuring the value of other goods. b. is a means of holding wealth for the future. c. has an absolute value in gold. d. is widely accepted as payment for purchases.