Which of the following is false? a. with a 10% required reserve ratio, a $10,000 cash deposit in a bank would result in an increase in the bank's excess reserves by $1000. b. the fed controls the supply of money, even though privately owned commercial banks actually create and destroy money by making loans. c. with a 10% required reserve ratio, a $1,000 bond purchase by the fed directly creates $1,000 in money in the form of bank deposits, and indirectly permits up to $9,000 in additional money to be created through the multiple expansion in bank deposits. d. when the fed sells government bonds, it will tend to cause a multiple contraction of bank deposits.

Which of the following best explains why a large company can undersell small retailers? a. large companies can offer workers lower wages because they provide more jobs. b. large companies can pay their employees less because they do unskilled jobs. c. large companies can negotiate better prices with wholesalers. d. large companies have fewer expenses associated with overhead.

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms.a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.

The simple interest in a loan of $200 at 10 percent interest per year is