When the Fed raises the legal reserve requirement, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans
b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans
c. increases the amount of excess reserves that banks hold, allowing them to make more loans
d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
E
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Is it possible to have a GDP deflator of less than 100?
A. Yes, it would indicate a year when prices were lower than in the base year. B. Yes, it would indicate a year when output was lower than in the base year. C. No, that is mathematically impossible for the deflator to be less than 100. D. Yes, it would indicate a year when prices were lower than in the previous year.
If you believe that velocity is constant and that the aggregate supply curve is vertical, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of
a. nominal output and real output. b. nominal output and no change in real output. c. real output and no change in nominal output. d. the price level and real output.
Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist. QuantityPrice1$102$93$84$75$66$57$48$3If the marginal cost of producing each unit of output is $5, then at the monopolist's profit-maximizing level of output, the monopolist produces ________ units of output than is socially optimal.
A. 3 more B. 2 fewer C. 3 fewer D. 1 more
A company is selling wacky waving inflatable arm guys for very low prices, why is this?
a. there is a shortage b. there is a surplus c. the company cannot meet consumer demand d. equilibrium price has been reached