Suppose the required reserve ratio is 5 percent and the Fed buys a $10,000 bond. If money is deposited into a commercial bank, what will initially happen to money supply?
a. It will increase by $10,000.
b. It will increase by $5,000.
c. It will increase by 5 percent.
d. It will increase by $200,000.
A
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When an economy faces diminishing returns,
A) the slope of the per-worker production function becomes flatter as capital per hour worked increases. B) the per-worker production function shifts to the left. C) the per-worker production function shifts to the right. D) the slope of the per-worker production function becomes steeper as capital per hour worked increases.
A 2 percent rise in the price of a good leads to a 10 percent decrease in quantity demanded. The absolute price elasticity of demand is
A) 5. B) 10. C) 0.1. D) 1.0.
A theory or model is a simplification of reality, in much the same way that a road map shows only those features needed to get from one point to another.
a. true b. false
There is no market supply curve in:
A. monopolistically competitive and monopolistic markets. B. a perfectly competitive market. C. a monopolistically competitive market. D. a monopolistic market.