If the Federal Reserve Bank wants to lower the supply of money, it sells government bonds from its portfolio to the public in the nation’s bond markets.
Answer the following statement true (T) or false (F)
True
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If people have more time to adjust to a price change, the price elasticity of demand for that good is likely to
a. increase b. decrease c. fall to zero d. become equal to -1 e. remain unchanged
For any given tax, imposing a tax in a market with a highly inelastic demand will:
A. cause more deadweight loss than a market with an elastic demand. B. generate higher revenues than a market with an elastic demand. C. Both of these statements are true. D. Neither of these statements is true.
An increase in input prices will cause the aggregate supply curve to shift rightward
a. True b. False Indicate whether the statement is true or false
Expansionary monetary policy causes what?
a. a decrease in money supply b. an increase in interest rate c. a decrease in interest rate d. fewer loans to be initiated