Explain what is meant by economic efficiency. Does efficiency imply that the fastest production processes or the most powerful equipment must always be used? Explain
What will be an ideal response?
Efficiency involves a situation in which a given output is produced at lowest cost. Consequently, the fastest-operating or most powerful equipment may not always be efficient.
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Assume that there is a 25% reserve requirement and that the Federal Reserve buys $200 million worth of government securities. If the securities are purchased from the public, then this action has the potential to increase bank lending by a maximum of ________.
A. $800 million, and also by $800 million if the securities are purchased directly from commercial banks B. $600 million, and also by $600 million if the securities are purchased directly from commercial banks C. $800 million, but only by $600 million if the securities are purchased directly from commercial banks D. $600 million, but by $800 million if the securities are purchased directly from commercial banks
Which of the following statements best describes the U.S. budget scenario from World War II until about 1980?
a. During this period, the United States ran budget deficits almost every year, but the percentage increases in debt were smaller than the percentage growth of GDP, so the debt/GDP ratio declined. b. During this period, the United States ran budget deficits almost every year, but the percentage increases in debt were larger than the percentage growth of GDP, so the debt/GDP ratio increased. c. During this period, the United States ran budget deficits almost every year, the percentage increases in debt were larger than the percentage growth of GDP, yet the debt/GDP ratio declined. d. During this period, the United States ran budget deficits almost every year, the percentage increases in debt were smaller than the percentage growth of GDP, yet the debt/GDP ratio increased.
Each of the following is an industrial country except
A. Belgium. B. Germany. C. Vietnam. D. Sweden.
Each of the following factors contribute to the slope of the dynamic aggregate demand curve, except the:
A. extent to which monetary policymakers react to a change in current inflation. B. current level of technology. C. size of the response of aggregate expenditures to changes in the interest rate. D. strength of the effect of inflation on real balances.x