If the Federal Reserve buys $1,000 in bonds and the reserve requirement ratio is 0.5,
what happens to the money supply and the net worth of all banks?
a. The money supply decreases by $2,000 and net worth increases by $1,000.
b. The money supply increases by $500 and net worth increases by $500.
c. The money supply increases by $2,000 and net worth does not change.
d. The money supply increases by $500 and net worth does not change.
e. The money supply increases by $2,000 and net worth increases by $2,000.
If demand is price inelastic, a decrease in price
A natural monopoly, left to itself,
Assume that the publishing industry produces novels and textbooks, as shown in the
production possibilities frontier in Figure 2-9. Moving from point H to G, the
opportunity cost of those five additional textbooks equals
Figure 2-9
The vertical long-run Phillips curve
a. indicates the permanent unemployment rate
b. indicates the unemployment rate at the optimal level of GDP
c. is only one of several vertical curves that together are called interest rate targets
d. indicates the economy’s natural rate of unemployment
e. is more socially desirable than a horizontal Phillips curve would be
Abacus.com has just made an initial public offering of stock with the help of an
investment bank. It sold 5 million shares at a price of $84 each. How much money did
the corporation raise through this stock offering?
In the dollar-pound market, whenever there is an appreciation of the dollar, there is
a. an appreciation of the pound
b. a depreciation of the pound
c. a devaluation of the pound
d. a revaluation of the pound
e. no change in the value of the dollar
The demand for money
a. is the same as the demand for bonds
b. is the same as the supply of bonds
c. increases whenever the price level falls
d. reflects the constraints that people face
e. shows the people always demand as much money as possible
Under perfect competition, the demand curve facing a firm and the firm’s marginal
revenue curve are
Which of the following factors would not be considered by a technical analyst when
predicting a firm’s stock price?
If the British price level rose relative to the Swiss price level, there would be
a. a rightward movement along the supply of Swiss francs curve in the pound-franc
market
b. a leftward movement along the supply of Swiss francs curve in the pound-franc
market
c. an increased supply of Swiss francs to the pound-franc market
d. a decreased supply of Swiss francs to the pound-franc market
e. no change of the supply of Swiss francs curve in the pound-franc market
When there is a positive cross-price elasticity of demand between two goods,
If the Fed decreases the money supply, the interest rate
a. decreases and aggregate spending increases.
b. decreases and aggregate spending decreases.
c. increases and aggregate spending decreases.
d. increases and aggregate spending increases.
e. increases and money demand decreases.
If Mary has an absolute advantage over Bill in performing each of two tasks, then
Figure 5-11 shows five different levels of income for a particular state (in billions of
dollars) and the quantity of public higher education demanded there (for a given level
of tuition). What is the income elasticity of demand if income rises from $45 billion to
$55 billion?
The demand curve for dolls shows the quantity of dolls demanded