When the Fed sells bonds, the Fed:
A. reduces the reserves and the federal funds rate increases.
B. increases the reserves and the federal funds rate increases.
C. reduces the reserves and the federal funds rate decreases.
D. increases the reserves and the federal funds rate decreases.
Answer: A
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Changes in which of the following do NOT affect the natural unemployment rate?
A) the quantity of money B) the minimum wage C) unemployment benefits D) structural change E) the birth rate or other demographic data
How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science, it is a subject at which few excel?
a. Most people who study economics are not very bright. b. Good economists must possess a rare combination of gifts. c. Economics is quite boring; hence, people tend to lose interest in it before mastering it. d. Good thinkers become frustrated with economics because it does not make use of the scientific method.
A decrease in which of the following would decrease the tax wedge?
A) federal budget deficit B) national debt C) money supply D) marginal tax rate
Refer to the figure below. The growth of access to the Internet will cause the marginal:
A. benefit curve to shift from MB2 to MB1. B. cost curve to shift from MC2 to MC1. C. benefit curve to shift from MB1 to MB2. D. cost curve to shift from MC1 to MC2.