Suppose a bank purchases $50 of government securities using funds from reserves. How much do bank assets change as a result of this transaction?
In this case, the value of bank assets do not change. Recall, reserves and securities are recorded as assets for the bank. When the bank receives $50 of securities its assets increase by $50 . However, the purchase of securities decreased reserves by $50 . The net effect is no change in assets.
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Explain the relationship between real GDP and potential GDP and between the unemployment rate and the natural unemployment rate as the economy moves through a business cycle
What will be an ideal response?
Discrimination ________ the group being discriminated against and ________ the group being favored
A) decreases the demand for; increases the demand for B) increases the demand for; decreases the demand for C) decreases the supply of; increases the supply of D) increases the supply of; decreases the supply of
________ spending follows a smooth trend whereas, ________ spending is more volatile and subject to fluctuations
A) Government; consumer B) Consumer; government C) Consumer; investment D) Investment; consumer
Bar owners often offer lower beer prices to women than they do to men. This will increase bar revenues:
a. if women have a unit-elastic demand for beer. b. if women have an inelastic demand for beer. c. if women have an elastic demand for beer. d. if women have a negative income elasticity of demand for beer.