Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and real GDP remains the same.
b. The real risk-free interest rate rises, and real GDP falls.
c. The real risk-free interest rate and real GDP remain the same.
d. The real risk-free interest rate falls, and real GDP rises.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.B
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Suppose Barry is maximizing his utility from consuming used paperback novels and audio books. The price of a used novel = $4 and the price of an audio book = $8
If the marginal utility of the last novel was 32 units of utility (utils) what was the marginal utility of the last audio book purchased? A) 2 utils B) 12 utils C) 16 utils D) 64 utils
A firm could continue to operate for years without ever earning a profit as long as it is producing an output where
A) ATC > AVC. B) AFC < AVC. C) MR > AVC. D) MR < ATC.
It pays the firm to produce only if total variable costs exceed total revenue
a. True b. False Indicate whether the statement is true or false
Which of the institutions has influence over the United States Federal Reserve (the Fed)?
A) The United States Senate B) The Federal Reserve Board of Governors C) The President of the United States D) All of the above