In the market for bank reserves, the supply of reserves is
A. a downward sloping curve.
B. a vertical curve.
C. an upward sloping curve.
D. none of these.
Answer: B
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A supply curve typically slopes upward because:
a. opportunity cost of production increases as the quantity supplied increases. b. price and quantity supplied are inversely related. c. quantity supplied is positively related to consumer income. d. the substitution effect of a price change on quantity supplied is generally positive. e. the income effect of a price change on quantity supplied is generally negative.
Consider a good that you do not like at all, perhaps turnips. Given the market price for turnips, what would be your consumer surplus?
What will be an ideal response?
The rate of return in loanable funds describes the:
A. expected profit that a project will generate per dollar invested. B. cost of borrowing. C. interest rate on loans. D. the profit firms should make when investing borrowed funds.
The budget deficit/surplus projections for 2005 that were made in 2000 were wrong, because there was an
A. anticipated increase in defense spending. B. unanticipated increase in defense spending. C. unanticipated increase in interest rates. D. anticipated increase in immigration.