How does a reduction in the price level affect the position of the C + I + G + X curve and in turn the equilibrium level of real GDP?
A) The C + I + G + X curve shifts down, thereby reducing the equilibrium level of real GDP.
B) The C + I + G + X curve shifts down, thereby increasing the equilibrium level of real GDP.
C) The C + I + G + X curve shifts up, thereby reducing the equilibrium level of real GDP.
D) The C + I + G + X curve shifts up, thereby increasing the equilibrium level of real GDP.
D
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In response to the destructive bank panics of the Great Depression, future bank panics are designed to be prevented by
A) establishing a fractional reserve system of banking. B) increasing the required reserve ratio to 100%. C) the establishment of the Federal Deposit Insurance Corporation. D) the Federal Reserve System conducting open market operations. E) the Federal Reserve System acting as a lender of last resort.
Assume that you purchased a $1,000 perpetual bond that pays a market interest rate of 5 percent. If you attempted to sell this bond today subsequent to an increased market rate of interest of 7.5 percent, then you
a. could only sell this bond at a capital loss. b. could sell this bond at a capital gain. c. would not be able to sell this bond. d. could exchange your bond yielding 5 percent for a bond yielding 7.5 percent on an even exchange basis.
Suppose Bob owns two factories that are located several hundred miles apart. Bob decides to manage one of the plants himself, and he hires another person to manage the second plant
For purposes of operating the second plant, who is the agent and who is principal? A) Bob is the agent and the manager is the principal. B) Bob is the principal and the manager is Bob's agent. C) Both Bob and the manager are principals. D) We need more information to determine the identities of the principal and the agent in this case.
Economists look at which of the following to get a quick visual expression of income distribution?
a. Gini coefficient. b. IRS records of how much income each household earned. c. supply and demand curves for resources. d. Lorenz curve. e. surveys of business estimates for MRPs.