The North Korean economy is currently classified as:
A) a mixed economy.
B) market capitalism.
C) command socialism.
D) the same kind of economy as Sweden.
Ans: C) command socialism.
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If firms in monopolistic competition are earning economic profits, eventually
A) they shut down. B) they exit the industry. C) the market turns into a monopoly. D) new firms enter the industry. E) the firms in the market increase their production so that their economic profit disappears.
If 25 workers can pick 100 flats of strawberries per hour, then average product is
A) 100 flats per hour. B) 125 flats per hour. C) 75 flats per hour. D) 4 flats per hour. E) More information is needed about how many flats 24 workers can pick.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The GDP Price Index remains the same and reserve-related (central bank) transactions become more positive (or less negative). b. The GDP Price Index falls and reserve-related (central bank) transactions remain the same. c. The GDP Price Index and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Assume that the banking system has $200 billion in reserves. There are no excess reserves in the system. If the reserve requirement is decreased from 10 percent to 8 percent, what will happen to the level of excess reserves in the system?
A. There will be a deficiency of $40 billion in reserves. B. There will be a deficiency of $20 billion in reserves. C. There will be $20 billion in excess reserves. D. There will be $40 billion in excess reserves.