When a Japanese resident buys a good or service from a U.S. producer, there is a(n)
A) increase in the supply of yen in the foreign exchange market.
B) decrease in the supply of yen in the foreign exchange market.
C) increase in the demand for yen in the foreign exchange market.
D) decrease in the demand for yen in the foreign exchange market.
A
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 20%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$200Checkable deposits$1000Securities300Stock shares400Loans500 Property400 If the Fed reduced the reserve requirement from 20% to 16%, excess reserves in the commercial banking system would increase by ________ and the monetary multiplier would rise to ________.
A. $40 billion; 6.25 B. $10 billion; 5 C. $40 billion; 12.5 D. $10 billion; 10
Vertical contracts that aim to decrease retailer prices typically
a. Benefit the consumer and the manufacturer but hurt the retailer b. Benefit the manufacturer and retailer but hurt the consumer c. Benefit the retailer and consumer but hurt the manufacturer d. Benefit the manufacturer, retailer and consumer
If two countries each are currently producing two goods, and each begins to specialize in the good in which it has a comparative advantage, what will happen to total (world) output?
a. It will increase. b. It will decrease. c. It will be unchanged in both countries. d. It will rise in one country and fall in the other, but the total is unchanged. e. Uncertain; economic theory has no answer to this question.
When the average variable cost curve is upward sloping, what must be true about the marginal cost curve?
A) It is U-shaped. B) It is above the average variable cost curve. C) It is upward-sloping. D) It is below the average variable cost curve. E) It is a straight line.