If net exports are reduced, the expenditure schedule will shift
A. downward and equilibrium real GDP will rise.
B. upward and equilibrium real GDP will rise.
C. downward and equilibrium real GDP will fall.
D. upward and equilibrium real GDP will fall.
Answer: C
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Which of the following is not a tool the Fed uses to manage the money supply?
A) open market operations B) setting the discount rate C) setting reserve requirements for deposits in the banking system D) expanding and contracting deposit insurance
Which of the following are necessary conditions for successful price discrimination?
a. zero transactions costs b. a perfectly competitive market structure c. an imperfectly competitive market structure d. at least two different markets with different price elasticities of demand e. at least two different markets with different price elasticities of supply A) a, b, and d only B) c and d only C) a, c, d, and e only D) a and c only
If the Fed purchases $50,000 in T-bills from a bank, by how much will the bank's excess reserves increase?
A) by $50,000 B) by $50,000 times the required reserve ratio C) by $50,000 divided by the required reserve ratio D) Not enough information has been provided to answer the question.
Perfect Shots is company specializing in wedding photos and they have a fixed advertising budget. Perfect Shots advertises on the radio and the television and it costs $5,000 per unit of radio advertising and $14,000 per unit of television advertising. At their current advertising levels, the marginal benefit from radio advertising is $5,000 and the marginal benefit from television advertising is
$14,000. Which of the following is true? A) Perfect shots has optimally allocated their advertising budget, but that does not guarantee that they have maximized their profits. B) To optimally allocate their advertising budget, Perfect Shots should increase the amount of advertising in radio and television. C) Perfect shots has optimally allocated their advertising budget, which guarantees they have maximized their profits. D) To optimally allocate their advertising budget, Perfect Shots should decrease the amount of advertising in radio and television.