The Reserve Bank of Glassen is the apex banking institution in the country of Glassen. Money supply in Glassen will increase when:
a. the Reserve Bank of Glassen buys bonds from commercial banks
b. the Reserve Bank of Glassen raises the required reserve ratio for commercial banks.
c. the Reserve Bank of Glassen sells government bonds to commercial banks.
d. the Reserve Bank of Glassen raises the discount rate for commercial banks.
e. the Reserve Bank of Glassen prints new checks.
Ans: a. the Reserve Bank of Glassen buys bonds from commercial banks
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Refer to the scenario above. The winner of this auction will earn a surplus of ________ if he/she follows his/her dominant strategy
A) $100 B) $50 C) $400 D) $200
Suppose that consumers become more pessimistic about the future and, as a result, reduce their consumption by $10 billion. If the marginal propensity to consume is 0.80, how will this $10 billion reduction in consumption affect the equilibrium level of real GDP?
a. Real GDP will decrease by $8 billion. b. Real GDP will decrease by $10 billion. c. Real GDP will decrease by $40 billion. d. Real GDP will decrease by $50 billion.
Full employment to the classical school means that all workers
a. in the labor market are employed b. at any given wage rate are or will be employed c. who work at the equilibrium wage rate would not have been willing to work for less or more d. who are willing to work at the equilibrium wage rate are employed e. who are in the labor force are employed all the time
When a football manufacturer prices its footballs at $120 each, it has 10 footballs in stock at any given time. However, when the footballs are priced at $144 each, the manufacturer is left with 16 footballs in stock at any given time. What is the price elasticity of supply of the football?
a. 2.54 b. 0.39 c. 2.43 d. 0.45