Other things being equal, suppose that the demand for wheat in constant quality units increases. The increase in demand will cause
A) a surplus of wheat.
B) a higher equilibrium price and higher equilibrium quantity of wheat.
C) fall in the market clearing price of corn, a substitute for wheat.
D) a higher equilibrium quantity, but a lower equilibrium price of wheat.
Answer: B
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The monetary expansion process from an open market operation continues until
A) required reserves are eliminated. B) the Federal Reserve takes actions to stop the process. C) the discount rate is lower than market interest rates. D) excess bank reserves are eliminated.
Keynes believed that the best method for tackling recessions was to reduce government spending and raise taxes, thereby reducing the federal budget deficit
a. True b. False Indicate whether the statement is true or false
Popeye receives a marginal utility of 12 utils for the last can of spinach consumed. If the price of a can of spinach is 50 cents per can, then the marginal utility per dollar spent on the last can of spinach is equal to: a. 6 utils per dollar
b. 12 utils per dollar. c. 18 utils per dollar. d. 24 utils per dollar.
Suppose the price elasticity of demand for tacos is 0.80. If the price of tacos increases by 10 percent, then the quantity demanded of tacos should, ceteris paribus:
a) Decrease by 8 percent. b) Decrease by 1.25 percent. c) Increase by 8 percent. d) Increase by 1.25 percent.