In an open-market purchase the Federal Reserve ________ government bonds from the public and the supply of bank reserves ________.
A. sells; decreases
B. buys; increases
C. buys; decreases
D. sells; increases
Answer: B
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When the economy is operating at a level of real GDP that is greater than its potential level, we know that
A) the structural rate of unemployment is negative. B) the frictional unemployment is zero. C) the actual unemployment rate is greater than the natural rate of unemployment. D) the cyclical rate of unemployment is negative.
Constant returns to scale (CRS) implies that when the firm ________
A) doubles all inputs, output more than doubles B) doubles all inputs, output doubles C) doubles all inputs, output increases by less than 100 percent D) doubles all inputs, output remains constant E) none of the above
This curve shows there is a(n) ______ relationship between the quantity of real GDP demanded and the overall price level.
a. inverse
b. neutral
c. positive
d. indeterminate
Consider a market consisting of two firms where the inverse demand curve is given by P = 500 ? 2Q1 ? 2Q2. Each firm has a marginal cost of $50. Based on this information, we can conclude that consumer surplus in the different equilibrium oligopoly models will follow which of the following orderings?
A. CSBertrand > CSStackelberg > CSCournot > CSCollusion B. CSBertrand > CSCournot > CSStackelberg > CSCollusion C. CSStackelberg > CSBertrand > CSCournot > CSCollusion D. CSCollusion > CSStackelberg > CSCournot > CSBertrand