In which case can we be sure real GDP rises in the short run?
a. foreign economies expand and government purchases rise.
b. foreign economies expand and government purchases fall.
c. foreign economies contract and government purchases fall.
d. foreign economies contract and government purchases rise.
a
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The Fed can attempt to decrease the federal funds rate by
A) lowering the reserve requirement, which increases the money supply. B) lowering the reserve requirement, which decreases the money supply. C) raising the reserve requirement, which increases the money supply. D) raising the reserve requirement, which decreases the money supply.
An increase in the supply of capital, which is a substitute to labor, will lead to a decrease in the demand for labor
Indicate whether the statement is true or false
When a bank pays a check drawn on a customer's account to another bank, the bank loses
A) capital equal to the amount of the check. B) capital equal to the required reserve ratio times the amount of the check. C) reserves equal to the amount of the check. D) reserves equal to the required reserve ratio times the amount of the check.
If the government requires a natural monopoly to price at marginal cost,
a. monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good. b. monopoly firms will operate at a loss because P < AC. c. more firms will be able to enter the market. d. producer surplus will increase because quantity supplied is greater.