The money supply contracts when the Fed
A. replaces old worn-out notes and bills.
B. borrows from the Treasury.
C. sells government securities.
D. purchases stocks from corporate businesses.
Answer: C
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A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays $20,000 a year, and take over a store building that he owns and currently rents to his brother for $6,000 a year. His expenses at the sushi bar would be $50,000 for food and $2,000 for gas and electricity. What are his explicit costs?
a. $26,000. b. $66,000. c. $78,000. d. $52,000. e. $72,000.
A tax cut designed to encourage investment and stimulate economic growth
a. must be matched by a cut in government spending in order to be effective b. must be matched with tax increases in other areas, or with a cut in government spending, if crowding out is to be avoided c. will only work if it decreases the size of the budget deficit d. can only be effective if the tax burden is redistributed or government spending is cut e. will only work if it is a cut in the capital gains tax
A tax is imposed on a certain good. The tax produces revenue of $5,000 for the government. The tax reduces consumer surplus by $3,000 and it reduces producer surplus by $4,000 . What is the amount of the deadweight loss of the tax?
Suppose the table below describes the relationship between price and quantity demanded for a monopolist.QuantityPrice1$102$93$84$75$66$57$48$3 If the marginal cost of producing each unit of output is $5, then this monopolist maximizes its profit by charging ________ per unit.
A. $6 B. $5 C. $3 D. $8