Assume that the M1 multiplier is 2.5. If the Federal Reserve purchases $200 worth of government securities, the money supply will
A) rise by $200.
B) rise by $500.
C) fall by $200.
D) fall by $500.
B
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Rational expectations theory would imply that the graphical relationship between unemployment and inflation indicated by the Phillips curve is ____ in the short-run
a. vertical b. positively sloped c. negatively sloped d. horizontal
Which of the following will most likely result from a destruction of half of the Florida orange crop due to a hard freeze?
a. a decrease in the demand for oranges b. an increase in the supply of oranges c. an increase in the quantity of oranges bought and sold d. an increase in the price of oranges
Which situation below would represent a surplus in the fertilizer market?
A. quantity demanded is 1.2 million; quantity supplied is 1.1 million. B. market price $2.00 per bag; equilibrium price $2.25 per bag. C. market price $2.50 per bag; equilibrium price $2.00. D. quantity supplied this year is 25% greater than quantity supplied last year.
Given a tax on wages, the economic theory of labor markets would
A. predict people work less as a result of the tax. B. predict people work more as a result of the tax. C. be unable to predict whether people would work more or less as a result of the tax. D. predict higher unemployment.