Which of the following will not cause the demand for milk (a normal good) to increase in the current time period?
A) a fall in the price of milk
B) an increase in income
C) an expected increase in milk prices
D) a decrease in the price of cookies (a complement)
Ans: A) a fall in the price of milk
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If banks choose not to lend out their excess reserves, the money supply will not expand
a. True b. False Indicate whether the statement is true or false
A financial intermediary that sells shares in itself to the public, and then uses the funds to buy a wide variety of financial assets is called a:
A. mutual fund. B. stock exchange. C. commercial bank. D. credit union.
The payment of unemployment compensation tends to induce business firms to
A) lay off workers as opposed to lowering sales. B) search for new workers for shorter periods of time. C) lay off workers as opposed to increasing inventories and/or reducing hours worked for all employees. D) recall previously laid off workers more rapidly.
Which of the following is a normative statement?
A. Fiscal policy is determined by the Congress and the president. B. Tax cuts ought to be enacted for the good of the economy. C. Monetary policy is determined by the Federal Reserve System. D. The Gross Domestic Product is the dollar value of all goods and services produced in a country in a year.