Which of the following policies can be adopted by the Fed in order to stimulate an economy in the short run?
a. Increase the market interest rate
b. Purchase U.S. government securities
c. Increase the discount rate
d. Increase the price of consumer goods
e. Increase the required reserve ratio
b
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The "Greenspan doctrine"—central banks should not try to prick bubbles—was based on which of the following arguments?
A) Asset-price bubbles are nearly impossible to identify. B) Monetary actions would be likely to affect asset prices in general, rather than the specific assets that are experiencing a bubble. C) Raising interest rates has often been found to cause a bubble to burst more severely. D) Monetary policy actions to prick bubbles can have harmful effects on the aggregate economy. E) All of the above.
Suppose that in a perfectly competitive industry the equilibrium industry quantity is 10,000 units. Suppose that the monopoly output is 5,000 . For a 2-firm Cournot Oligopoly (N =2) known as a duopoly, what is a likely Cournot QUANTITY for the industry?
a. 3,000 units b. 5,000 units c. 6,667 units d. 10,000 units e. 15,000 units
Use the following data to answer the next question.The disposable income (DI) and consumption (C) schedules are for a private, closed economy (an economy with no government and no international trade). All figures are in billions of dollars.Disposable IncomeConsumption$300$310350340400370450400500430The marginal propensity to consume is
A. 0.80. B. 0.60. C. 0.40. D. 0.75.
When the current price of an item is greater than the item's market clearing price
A. quantity supplied is greater than quantity demanded. B. quantity supplied is less than quantity demanded. C. supply is greater than demand. D. demand is greater than supply.