Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. If demand for wheat is D3, then a profit-maximizing firm will produce ________ units and earn ________.
A. 12; negative profits
B. 13; exactly a normal return
C. 15; positive profits
D. 9; positive profits
Answer: C
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Which of the following contributed to the positive output ratio experienced in the 1960s?
A) decreased government spending B) tax decreases C) favorable oil price shocks D) favorable farm price shocks
When accounting profits are negative, economic profits
A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero.
The quantity of money demanded to satisfy transactions needs
a. is intended for unexpected expenditures b. increases with the level of nominal GDP c. decreases with the level of nominal GDP d. is unrelated to either national income or the interest rate e. varies inversely with the liquidity demand for money.
Ambassador Bank has $5 million in deposits and $750,000 in reserves, with a reserve requirement ratio of 15 percent. If the Fed lowers the reserve requirement ratio to 12 percent, Ambassador Bank’s new excess reserves could potentially expand the money supply by ______.
a. $1,000,000 b. $150,000 c. $1,250,000 d. $250,000