What is the most direct method the Fed uses to change the monetary base?
A) open market operations
B) changing the required reserve ratio
C) changing the federal funds rate
D) changing the level of discount loans
A
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A shortage occurs whenever
a. quantity demanded exceeds quantity supplied at the equilibrium price b. price is less than equilibrium price c. quantity demanded is less than quantity supplied d. goods are scarce e. some of the people who need the product are not willing and able to buy it at the equilibrium price
The midpoint method for calculating elasticities is convenient in that it allows us to
a. ignore the percentage change in quantity demanded and instead focus entirely on the percentage change in price. b. calculate the same value for the elasticity, regardless of whether the price increases or decreases. c. assume that sellers' total revenue stays constant when the price changes. d. restrict all elasticity values to between 0 and 1.
Critics of supply-side economics claim that the economic growth in the 1980s was a direct result of ______.
a. a large budget deficit b. deflation c. tax cuts d. tax increases
When the demand for a good is price-elastic at a given output level:
A. total revenue is negative. B. total revenue for the good will increase if its price decreases. C. a large change in price will result in a relatively small change in the quantity demanded. D. an increase in price will lead to an increase in total revenue for firms selling the good.