When stock prices fall significantly, people may feel less wealthy and thus decide to consume less of their current flow of disposable income. In our consumption function, this can be represented by a
A) fall in (Y - T).
B) rise in T.
C) rise in c.
D) fall in a.
D
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The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is
A) $60. B) $405. C) $0. D) $210,000. E) unknown because more information is needed to determine Paul's profit.
The Federal Reserve's main source of income is
a. fees charged to banks. b. funds budgeted by Congress. c. fees charged to the public every time they use an ATM. d. income from interest on the government securities it owns.
According to the quantity theory of money, what is the effect of an increase in the quantity of money?
What will be an ideal response?
To increase the quantity of money in the economy, the Federal Reserve can
A) print more money and give it to the banks. B) increase the required reserve ratio. C) buy government bonds in an open market operation. D) sell government bonds in an open market operation. E) cut taxes.