Questions from General Economics

Q: Trace the cause-and-effect chain through which financing and

Trace the cause-and-effect chain through which financing and refinancing of the public debt might affect real interest rates, private investment, the stock of capital, and economic growth. How might i...

Q: What do economists mean when they say Social Security and Medicare are

What do economists mean when they say Social Security and Medicare are "pay-as-you-go" plans? What are the Social Security and Medicare trust funds, and how long will they have money left in them? Wha...

Q: Compare the elasticity of a monopolistic competitor’s demand with that of a

Compare the elasticity of a monopolistic competitor’s demand with that of a pure competitor and a pure monopolist. Assuming identical long-run costs, compare graphically the prices and outputs that wo...

Q: What is rent seeking and how does it differ from the kinds

What is rent seeking and how does it differ from the kinds of profit maximization and profit seeking that we discussed in previous chapters? Provide an actual or hypothetical example of rent seeking b...

Q: If the MPS rises, then the MPC will: a

If the MPS rises, then the MPC will: a. Fall. b. Rise. c. Stay the same.

Q: Which of the following help to explain why the aggregate demand curve

Which of the following help to explain why the aggregate demand curve slopes downward? a. When the domestic price level rises, our goods and services become more expensive to foreigners. b. When gove...

Q: A goldsmith has $2 million of gold in his vaults.

A goldsmith has $2 million of gold in his vaults. He issues $5 million in gold receipts. His gold holdings are what fraction of the paper money (gold receipts) he has issued? a. 1/10. b. 1/5. c. 2/5....

Q: A commercial bank has $100 million in checkable-deposit liabilities

A commercial bank has $100 million in checkable-deposit liabilities and $12 million in actual reserves. The required reserve ratio is 10 percent. How big are the bank’s excess reserves? a. $100 milli...

Q: The actual reason that banks must hold required reserves is:

The actual reason that banks must hold required reserves is: a. To enhance liquidity and deter bank runs. b. To help fund the Federal Deposit Insurance Corporation, which insures bank deposits. c. To...

Q: A single commercial bank in a multibank banking system can lend only

A single commercial bank in a multibank banking system can lend only an amount equal to its initial preloan _________________. a. Total reserves. b. Excess reserves. c. Total deposits. d. Excess depo...