Which of the following will increase the money supply?
A) an increase in the discount rate (relative to the federal funds rate)
B) a decrease in the required reserve ratio
C) an open market sale by the Fed
D) a and c
E) b and c
B
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If the elasticity of demand for the latest American Idol album is 1.4, this means
A. few substitutes for the American Idol album exist. B. a 10% decrease in the price leads to a 140% increase in quantity demanded. C. a 5% increase in the price leads to a 7% decrease in quantity demanded. D. a 1% increase in the price leads to a 14% decrease in quantity demanded.
Refer to the above table. If the price is $3, the perfectly competitive firm should produce
A) 102 units. B) 105 units. C) 103 units. D) 104 units.
The legal system imposes large financial penalties on firms caught violating Environmental Protection Agency guidelines. The EPA’s standards program is thus an example of a
A. market-based approach to reducing pollution. B. system of emissions taxes. C. system of emissions permits. D. direct-control system enforced through the courts.
All else equal, when the Federal Reserve Banks engage in a restrictive monetary policy, the prices of government bonds usually:
A. fall. B. rise. C. remain constant. D. move in the same direction as the bonds' interest rate yield.