If the typical firm in a perfectly competitive market was depicted in the graph below, what would be most likely to occur?
A. New firms would be likely to enter, increasing the market price.
B. New firms would be likely to enter, decreasing the market price.
C. Existing firms would be likely to exit, increasing the market price.
D. Existing firms would be likely to exit, decreasing the market price.
Answer: B. New firms would be likely to enter, decreasing the market price.
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The change in saving divided by the change in income is the
a. ratio of saving to income b. same as saving divided by income c. average propensity to save d. marginal propensity to consume e. marginal propensity to save
The newly industrialized Asian economies have developed by adopting the latest technology and investing in _____.?
Fill in the blank(s) with the appropriate word(s).
Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 20%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$200Checkable deposits$1000Securities300Stock shares400Loans500 Property400 Suppose the Fed wants to increase the money supply by $1,000 billion to drive down interest rates and stimulate the economy. To accomplish this, it could lower the reserve requirement from 20% to ________.
A. 15% B. 10% C. 14% D. 12%