Suppose that the price elasticity of supply is 0.5 and the price increases by 4%. We would predict:
A. an 8% increase in quantity supplied.
B. a 2% increase in quantity supplied.
C. a 0.8% increase in quantity supplied.
D. a 0.2% increase in quantity supplied.
Answer: B
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When the Fed wants to undertake open market operations, it
A) buys or sells securities through the trading desk at the New York Federal Reserve Bank. B) can require all commercial banks to buy from or sell to it. C) can require all member banks to buy from or sell to it. D) buys from or sells to the U.S. Treasury.
If the government taxes producers that create pollution, the government's policy
A) allows the producers to pollute more by increasing their costs. B) results in less production because the producers' costs have risen. C) eliminates pollution entirely by shifting the supply curve leftward. D) allows the firms to pass along higher costs but doesn't cut pollution. E) forbids the firms from passing along higher costs.
Many economists believe the Fed was in large part responsible for bringing about the Great Moderation, gaining more credibility as it transitioned away from ________ and more towards ________
A) fiscal policy; monetary policy B) discretionary policy; a rules policy C) monetary rules; discretionary rules D) targeting inflation; targeting unemployment
Ajax Corporation has just decided to let managers work from home one day a week. This decision will make working conditions better and will
A) cause the demand curve for labor for managers to increase. B) increase the elasticity of demand for labor for managers. C) lead to an increase in the supply curve of labor for managers. D) leave the supply curve of labor unchanged.