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Imagine that the economy is in long-run equilibrium. Then, perhaps because of improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time.   Refer to Optimism. Which curve shifts and in which direction? aggregate demand shifts right aggregate demand shifts left aggregate supply shifts right aggregate supply shifts left

In a fractional-reserve banking system, a bank     keeps only a fraction of its deposits in reserve does not accept deposits does not make loans None of the above is correct

Suppose you will receive $500 at some point in the future. If the annual interest rate is 5 percent, then the present value of the $500 is 1. $411.26 if the $500 is to be received in 5 years and $338.95 if the $500 is to be received in 10 2 . $348.28 if the $500 is to be received in 5 years and $242.60 if the $500 is to be received in 10 3. $291.11 if the $500 is to be received in 5 years and $272.89 if the $500 is to be received in 10 4. $291.11 if the $500 is to be received in 5 years and $236.49 if the $500 is to be received in 10

Which list ranks assets from most to least liquid?     stocks, money, cars, houses stocks, cars, money, houses money, stocks, cars, houses money, cars, houses, stocks

When conducting an open-market operations during a recession, the Fed     sells government bonds, and in so doing increases the money supply sells government bonds, and in so doing decreases the money supply buys government bonds, and in so doing increases the money supply buys government bonds, and in so doing decreases the money supply

The endowment effect refers to: 1. The tendency to value something more after acquiring it. 2. The belief that future prices of an asset will follow past price trends. 3. The tendency to overestimate the impact of recent information on decision-making. 4. The tendency to focus on the most available information when making a decision

The primary advantage of mutual funds is that they always provide the highest return always allow people to “beat the market” allow people to diversify and reduce risk allow people to diversify, which increases risk and return  

Bank of Springfield     Assets Liabilities Reserves $19,800 Deposits $180,000 Loans 160,200       If the bank has lent out all the money it can, what is the reserve requirement? 1. 8.1% 2. 11% 3. 12.4% 4. 18.6%

We would expect the interest rate on Bond A to be higher than the interest rate on Bond B if the two bonds have identical characteristics but the credit risk associated with Bond A is lower than the credit risk associated with Bond Bond A was issued by the city of Philadelphia and Bond B was issued by New York Bond A has a term of 20 years and Bond B has a term of 2 years All of the above are correct

Which of these business models have been accused of being a Ponzi scheme? 1. ABCs         2. THCs                 3. FDIC              4. MLMs