If a $1 million open market purchase by the Fed generates a new deposit at a bank that immediately causes the bank's reserves held at the Fed to increase by $1 million, then the T-account effects are that the bank's assets and liabilities ________ by
$1 million and that the Fed's assets and liabilities ________ by $1 million.
A) increase; decline B) decline; decline C) increase; increase D) decline; increase
C
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If Dell Computer Company could produce more computers at lower long-run average cost by increasing the quantity of all the inputs it uses, Dell definitely would experience
A) decreasing marginal returns. B) diseconomies of scale. C) increasing marginal returns. D) economies of scale.
The president of Toyota's Georgetown plant was quoted as saying, "Demand for high volumes saps your energy. Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years"
This quote suggests that A) as Toyota expanded its capacity, it experienced diseconomies of scale. B) Toyota was focused on "churning" out cars for which it did not invest sufficiently in training its workers. C) high demand for Toyota's cars prevented the company from focusing on its strength: auto design. D) Toyota was experiencing an excess demand for its automobiles which it had difficulty keeping up with.
Automatic stabilizers create ________ during recessions from increased government spending on welfare and unemployment insurance, and reduced tax revenues, and create _________ during peak growth periods of the economy from reduced government welfare spending and increased tax revenues
a. fiscal stimulus, fiscal contraction b. fiscal stimulus, fiscal stimulus c. fiscal contraction, fiscal stimulus d. fiscal contraction, fiscal contraction
When contestable markets exist,
a. it must be an oligopoly b. the firms set high prices and earn economic profits c. the threat of new firms entering keeps prices low d. the government must take steps to regulate the firms e. laissez-faire can lead to greater market concentration