The preferred asset ratio "U/D" affects the M2 money multiplier because:
a. Actually, it is does not affect the M2 money multiplier because customary reserves are not a part of M2.
b. Funds kept in customary reserves reduce financial institution's ability to lend.
c. U/D affects the required reserves financial institutions must hold and thereby affects the banking system's lending ability.
d. U/D determines the funds flowing into near-money accounts.
e. None of the above.
.B
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Which of the following would be categorized as an implicit cost?
a. not being able to spend your $10,000 savings if you sink the money in your business b. the cost of purchasing supplies for your house-cleaning business c. the cost of purchasing auto insurance for your dry-cleaning delivery business A) a only B) a and c only C) b and c only D) all of the above
A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end. Consumption of private fixed capital in the year was $25 billion. Assuming stable prices, gross investment was:
A. $25 billion B. $50 billion C. $75 billion D. $90 billion