A decrease in the money supply, in the short run (before the price level has adjusted to restore general equilibrium), causes output to ________ and the real interest rate to ________.
A. rise; fall
B. fall; fall
C. fall; rise
D. rise; rise
Answer: C
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Which of the following is NOT an accurate description of open market operations prior to 2008?
A) It was used to affect the market for bank reserves. B) It was used to control the federal funds rate. C) It involved buying and selling of short-term Treasury securities. D) It involved buying and selling long-term securities.
Happy Cows is a dairy farm that is currently earning $5,000 in economic profit. The managers of Happy Cows are considering adding a second dairy farm; however, the managerial diseconomies from adding the second farm cause Happy Cows current farm's economic profit to fall to $3,000. It is economically sound for Happy Cows to add the second farm if ________.
A) the second farm's economic profit is at least $1,500 B) the second farm's economic profit is at least $1,750 C) the second farm's economic profit is less than $2,000 D) the second farm's economic profit exceeds $2,000
A recent research signified the large health benefits of eating cooked tomatoes. Holding other things constant, this will cause
a. The demand curve for tomatoes to shift to the right b. The demand curve for tomatoes to shift to the left c. The supply curve for tomatoes to shift to the right d. The supply curve for tomatoes to shift to the left
To prevent the dollar from depreciating, the U.S. central bank can try to fix the currency value of the dollar when they
A) buy U.S. dollars in the foreign exchange market. B) sell U.S. dollars in the foreign exchange market. C) abandon the U.S. dollar and use another country's currency as its legal currency. D) buy foreign currencies in the foreign exchange market.