Assume that the currency-deposit ratio is 0.5. The Federal Reserve carries out open-market operations, purchasing $1 million worth of bonds from banks. This action increased the money supply by $2 million. What is the reserve-deposit ratio?
A. 0.40
B. 0.50
C. 0.35
D. 0.25
Answer: D
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When a country imports a good or service from the rest of the world, the consumer gains because the greater the ________ in price and ________ in quantity bought, the greater is the ________ to the consumer
A) fall; decrease; gain B) rise; increase; gain C) fall, increase; gain D) fall; increase; loss E) rise; decrease; gain
Which of the following is not a reason why the U.S. economy has been more stable since 1950?
A) Unemployment insurance and other government programs curtail the decline in spending that occurs during a recession. B) Services have become a larger fraction of GDP and goods have become a smaller fraction of GDP. C) Goods have become a larger fraction of GDP and services have become a smaller fraction of GDP. D) The government has actively pursued policy to combat recessions and prolong expansions.
If General Electric finds that when it doubles both its plant size and the amount of associated inputs, its output level does not double, then
a. the law of diminishing returns is in effect. b. long-run average costs must be decreasing. c. the firm is experiencing diseconomies of scale. d. the firm should increase production. e. the firm is experiencing constant returns to scale.
When pollution emissions can be measured, taxation will tend to be more effective than any other method of controlling pollution.
Answer the following statement true (T) or false (F)