If commercial banks are maintaining a 5 percent reserve/deposit ratio and the Fed lowers the required reserve ratio to 3 percent, then banks may ________ their loans and deposits, and the money supply may ________.
A. decrease; decrease
B. increase; increase
C. decrease; increase
D. increase; decrease
Answer: B
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Suppose that a perfectly competitive firm's marginal revenue equals $12 when it sells 10 units of output. If the marginal cost of producing the 10th unit is $14, to maximize its profit the firm should
A) do nothing because it is already maximizing its profit. B) decrease its production. C) increase its production. D) shut down. E) increase the price it charges for its product.
Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call
A) a relative price. B) a money price. C) an indexed price. D) an opportunity price.
What is cyclical unemployment?
What will be an ideal response?
In the absence of discrimination, as human capital investments increase, wages will generally
A) decrease. B) increase. C) not change. D) increase or decrease.