A fall in the price of farm land and farm prices in the early 1980s caused
a. farmers to borrow more heavily on that land to plant crops
b. banks that had lent heavily to farmers to go bankrupt when the farmers were unable to repay their loans
c. banks that had lent heavily to farmers to earn extraordinary profit when farmers repaid loans faster than usual
d. banks to increase their loans to farmers until the price of farm land increased
e. banks and farmers to get together to renegotiate their loans until the price of land and goods increased
B
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The Fed buys securities and gives a bond dealer a check for the amount. After the check has cleared
A) reserves remain unchanged because the increase of reserves at the dealer's bank are offset by an increase in reserves at the Fed. B) reserves have risen by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed. C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed. D) reserves have fallen by the amount of the reserves times the reserve ratio and the money supply increases by the difference between the amount of the check and the increase in the reserves.
Give an example of government intervention that is intended to reduce an externality
Which of the following is considered a barrier to entry?
A.) Price taking B.) Standardized products C.) Brand Loyalty D.) Economic profit
According to mainstream economists the basic determinant of real output, employment, and the price level is
A. the incentive to work, save, and invest. B. the level of aggregate expenditures. C. the supply of money. D. information and people's expectations.