Refer to Figure 10.1. If the level of real GDP is initially Y2, firms will ________ production until equilibrium is reached at ________
A) increase; Y2
B) decrease; Y2
C) increase; Y1
D) decrease; Y1
D
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Suppose Florida issues an alligator hunting permit to Jackson, who values an alligator hunt at $2,500, instead of Oliver, who values an alligator hunt at $4,000, and alligator hunting permits are allowed to be bought and sold in a secondary market
If Jackson and Oliver agree on a price for Jackson to transfer the permit to Oliver, society would capture ________ cooperative surplus. A) an additional $1,500 of B) no additional C) an additional $6,500 of D) The additional cooperative surplus captured by society would depend on the negotiated price of the permit.
The use of foreign exchange reserves to keep exchange rates constant over time is called
A) a fixed exchange rate system. B) the Bretton Woods system. C) a fiscal fix. D) a floating exchange rate system.
If a tax shifts the supply curve upward (or to the left), we can infer that the tax was levied on
a. buyers of the good. b. sellers of the good. c. both buyers and sellers of the good. d. We cannot infer anything because the shift described is not consistent with a tax.
The balance sheet below is for the First Federal Bank. Assume the required reserve ratio is 20 percent.
Refer to the above information. If the original bank balance sheet was for the whole commercial banking system rather than a single bank, loans and deposits could have been expanded by a maximum of:
A. $40,000
B. $100,000
C. $200,000
D. $300,000