In an open economy, what is the source of supply of dollars in the foreign-currency exchange market?
A. Net exports
B. Exports
C. Net capital outflow
D. Investment and net capital outflow
Answer: C. Net capital outflow
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Suppose the market-clearing price of wheat is $2.50 per bushel. At a price above $2.50,
A) supply would equal demand. B) quantity supplied would equal quantity demanded. C) quantity supplied would exceed quantity demanded. D) quantity supplied would be less than quantity demanded.
When the price of a normal good decreases,
a. both the income and substitution effects encourage the consumer to purchase more of the good. b. both the income and substitution effects encourage the consumer to purchase less of the good. c. the income effect encourages the consumer to purchase more of the good, and the substitution effect encourages the consumer to purchase less of the good. d. the income effect encourages the consumer to purchase less of the good, and the substitution effect encourages the consumer to purchase more of the good.
A bank has $7 million in checkable deposits and $1.2 million in total reserves. If the required reserve ratio is 10 percent, then the bank has
A) required reserves of $700,000. B) excess reserves of $500,000. C) excess reserves of $1,080,000. D) required reserves of $120,000. E) a and b
Entrepreneurs are people who ______.
a. sit on a corporate board of directors
b. earn profits
c. pay dividends
d. startup businesses