Assuming a reserve requirement of 10 percent, if the Fed sells $20 billion in bonds to the public, the lending capacity of the system will eventually
A. Decrease by $20 billion.
B. Increase by $200 billion.
C. Decrease by $200 billion.
D. Increase by $20 billion.
Answer: C
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When an economy relies on specialization,
A) the economy will generally produce only one product. B) the economy will usually be heavily agricultural. C) each individual in the economy produces the goods or services for which he or she has relatively the best ability. D) each individual will be assigned by the government to produce that good or service the government believes the economy should specialize in.
In the long-run, a perfectly competitivel firm will achieve
a. Average rate of return b. Above average profits c. Losses d. Economic Profits
We can be sure that the equilibrium price will fall when: a. supply and demand both increase
b. supply and demand both decrease. c. supply increases and demand decreases. d. supply decreases and demand increases.
Government laws and policies need to be uniformly enforced. But this leads to all of the following problems, except:
A. Inflexibility B. Massive paperwork C. Excessively detailed rules D. Haphazard application