In a two-country world consisting of Japan and the United States, a contraction in the Japanese economy will lead to lower Real GDP in the United States
Indicate whether the statement is true or false
True
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Reserves that the Fed injects into the banking system are ultimately
a. converted into loans that banks make to other banks b. distributed among different banks in the system as required reserves c. end up in just two or three banks d. ineffective at increasing money supply e. important to banks that want more customers
Opportunity cost is the value of the next best alternative that is given up
a. True b. False Indicate whether the statement is true or false
Suppose that the Fed decides to increase the growth rate of the money supply in the United States. What is most likely to happen to the U.S. trade deficit and to GDP?
a. The trade deficit will fall; GDP will fall. b. The trade deficit will rise; GDP will rise. c. The trade deficit will fall; GDP will rise. d. The trade deficit will rise; GDP will fall.
For the following changes in the economy, indicate whether short-run aggregate supply or long-run aggregate supply will be affected. Indicate the direction of the change
a. an improvement in manufacturing technology b. an increase in the world price of antimony (a chemical that the U.S. imports) c. a bumper potato crop in the southern "potato belt"