Depository institutions do all of the following EXCEPT
A) set the required reserve ratio.
B) create liquidity.
C) pool risks.
D) minimize the cost of obtaining funds.
A
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Using the information in the above table, the unemployment rate is
A) 4.5 percent. B) 4.3 percent. C) 2.8 percent. D) 6.0 percent.
An improvement in the technology used to produce cell phones would be shown by a:
A. rightward shift of the supply curve for cell phones. B. leftward shift of the supply curve for cell phones. C. rightward shift of the demand curve for cell phones. D. leftward shift of the demand curve for cell phones.
Suppose the government spends $10 billion subsidizing firms producing electricity with wind turbines because these firms are high cost producers. Will the subsidies lead to economic growth and higher income levels?
a. Yes, because more people will be employed by the firms producing electricity with wind turbines. b. No, the turbines are an inefficient form of producing electricity and therefore the subsidies will increase the opportunity cost of supplying it. c. Yes, because the government will be able to finance the subsidies without reducing private sector output. d. Uncertain, higher income levels will be achieved if the employment of the firms producing electricity with the wind turbines expands; if not, incomes will fall.
Suppose that after five solid years of economic growth, Eurekaland begins to experience inflationary pressures due to strong consumer and investor confidence. If Eurekaland's Central Bank wants to prevent inflation from becoming a major problem, which of the following actions should it take?
A) It should reduce the money supply to push interest rates higher. B) It should increase the money supply to push interest rates higher. C) It should reduce the money supply to push interest rates lower. D) It should increase the money supply to push interest rates lower.