If inflation is positive and is perfectly anticipated
A) those that lend money lose. B) no one in the economy loses.
C) those that borrow money lose. D) those that hold paper money lose.
D
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to reduce the money supply by $400 billion to drive up interest rates and dampen inflation. Assuming that the money multiplier is operating to full effect, to accomplish the desired reduction, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks B. buy $40 billion of U.S. securities from the banks C. buy $20 billion of U.S. securities from the banks D. sell $20 billion of U.S. securities to the banks
If a pollution tax in a market with an external cost changes the market so that it produces the efficient level of output, which of the following occurs?
i. The supply curve shifts leftward. ii. The price increases. iii. The quantity produced decreases. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
When the supply of labor to a firm is perfectly elastic the marginal factor cost will equal the
A) market price of the product. B) wage rate. C) marginal physical product. D) wage rate times the number of workers.
Economic growth is represented by a: a. rightward shift of the rule of 72 curve
b. movement along a production possibilities curve. c. rightward shift in potential real GDP (LRAS). d. leftward shift of the long-run aggregate supply curve (LRAS).