Suppose that milk producers expect that the price of milk is going to drop next week. This would cause
A) a decrease in the supply of milk today.
B) an increase in the supply of milk today.
C) an increase in the demand for milk today.
D) the selling price of milk to rise today.
Answer: B
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If there is a change in the federal funds rate from a target rate due to an increase in the demand for reserves, the Fed can maintain the target by:
A) causing an upward movement along the supply of reserves curve. B) causing the supply curve of reserves to shift to the left. C) causing a downward movement along the supply of reserves curve. D) causing the supply curve of reserves to shift to the right.
As Judy moves down along her budget line, ________
A) the opportunity cost of the good measured along the x-axis increases B) the opportunity cost of the good measured along the y-axis increases C) her income decreases D) her income does not change and neither does the relative price of the goods
Higher prices and price increases combined with lower real output and income, resulting from a major increase in input prices in the economy is called:
A) deflation. B) inflation. C) stagflation. D) none of the above.
If savers do not have fixed savings goals, the supply curve of loanable funds will generally be
A. horizontal. B. downward sloping. C. vertical. D. upward sloping.