Can bankers create money? No, they do not have this power. No, unless they have
ID: 1173953 • Letter: C
Question
Can bankers create money?
No, they do not have this power.
No, unless they have a special charter which permits it.
Yes, through multiple deposit creation.
Yes, by printing checks for customers.
Uncertain--economists are divided on this question.
Higher than expected inflation rate:
shifts short-run Phillips curve to the right.
shifts long-run Phillips curve to the right.
shifts both short-run and long-run Phillips curve to the right.
shifts short-run Phillips curve to the left.
The dead weight loss in the case of quotas is:
higher than the one in the case of tariffs.
lower than the one in the case of tariffs.
same as the one in the case of tariffs.
nil.
No, they do not have this power.
No, unless they have a special charter which permits it.
Yes, through multiple deposit creation.
Yes, by printing checks for customers.
Uncertain--economists are divided on this question.
Higher than expected inflation rate:
shifts short-run Phillips curve to the right.
shifts long-run Phillips curve to the right.
shifts both short-run and long-run Phillips curve to the right.
shifts short-run Phillips curve to the left.
Explanation / Answer
1.
Yes, bankers can create money and it is done through multiple deposit creation.
Money supply creation= Multiplier* deposit of money.
Hence option third is the correct answer.
Option third; Yes, through multiple deposit creation.
2.
Higher than expected inflation only shifts short-run philips curve rightward. This is because if all people expect more inflation, then workers demand more wages, so with more wages the cost of production increases. Hence the price of goods and services.
Hence Higher than expected inflation rate shifts short-run Phillips curve to the right.
Hence option first is the correct answer.
option first second; shifts short-run Phillips curve to the right.
3.
The dead weight loss in the case of quotas is equal to the dead weight loss due to tariff. This is because the distortion is same in both case.
Hence option third is the correct answer.
Option third; same as the one in the case of tariffs.