The Fed makes an initial cash injection of $10,000 by buying a $10,000 Treasury Bond from Janis. Janis deposits the $10,000 in her checking account at Friendly Bank. Friendly Bank holds $1,000 in reserve and lends out $9,000 to Bruno, who deposits this $9,000 in his checking account at Last National Bank. What is the total money supply so far in this question?
a. $19,000
b. $10,000
c. $9,000
d. $1,000
a
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For each one dollar increase in real GDP, aggregate planned expenditure
A) increases by less than a dollar. B) increases only if autonomous expenditure increases. C) increases by one dollar. D) increases by more than a dollar. E) is unaffected.
If a profit-maximizing firm finds that price exceeds average variable cost and marginal revenue is greater than marginal cost, it should: a. reduce output, but continue producing in the short run. b. increase output
c. shut down. d. not alter its production level since it is earning a profit.
Denmark is an importer of computer chips, taking the world price of $12 per chip as given. Suppose Denmark imposes a $5 tariff on chips. Which of the following outcomes is possible?
a. More Danish-produced chips are sold in Denmark. b. More foreign-produced chips are sold in Denmark. c. Danish consumers of chips become better off. d. Total surplus in the Danish chip market increases.
If the total costs of producing 1,500 units of output is $15,000 and this output sold to consumers for a total of $16,500, then the firm would earn profits of:
A. $1,000 B. $16,500 C. $1,500 D. $15,000