Answer:
There is a shortage of the product.
Explanation:
The market demand curve is downward sloping indicating a negative relationship with price. While the market supply curve is upward sloping indicating a positive relationship with price.
At the market equilibrium, both demand and supply are equal. At a price below the equilibrium level, the market demand is greater than supply. This causes a shortage in the economy.
Answer:
Option (B) is correct.
Option (D) is correct.
Explanation:
If banks kept 100 percent of deposits on hand as reserves, then this will indicate that all the deposited amount would be saved as reserves. Therefore, the reserve requirement ratio is 100% here which means that:
Reserve ratio = 100%
= 100 ÷ 100
= 1
and the money multiplier = 1 ÷ reserve requirement ratio
= 1 ÷ 1
= 1
Banks would not be able create new money by giving loans because the reserve requirement ratio is 100%.
Increases in health care costs on the health of individuals in society.
