Which of the following events would reduce the size of the "real-world" money multiplier?
a. Banks hold more excess reserves.
b. Households hold less currency.
c. The Fed increases the discount rate.
d. The Fed reduces the required reserve ratio.
a
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Monopolistic competitors advertise because
A) they have downward sloping demand curves. B) the demand curves they face are very elastic. C) they produce goods that can be differentiated from the goods of other firms in the industry. D) they can earn long-run profits if they advertise.
If the reserve requirement is 10 percent, which of the following pairs of changes would both allow a bank to lend out an additional $10,000?
a. the Fed buys a $10,000 bond from the bank or someone deposits $10,000 in the bank b. the Fed buys a $10,000 bond from the bank or the Fed lends the bank $10,000 c. the Fed sells a $10,000 bond to the bank or someone deposits $10,000 in the bank d. the Fed sells a $10,000 bond to the bank or the Fed lends the bank $10,000
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-Hours Per DayOutput Per Day0014048091201516023200 When the firm uses 9 employee-hours per day, its total variable cost each day is:
A. $56. B. $84. C. $30. D. $126.
Adding the market value of all final and intermediate goods and services in an economy in a given year would result in:
A. an amount less than GDP for that year. B. an amount greater than GDP for that year. C. the calculation of GDP for that year. D. the calculation of NDP for that year.