What are the three basic economic decisions each household must make?
What will be an ideal response?
(1.) How much of each product to demand.
(2.) How much labor to supply.
(3.) How much to spend today and how much to save for the future.
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The Fed buys securities and gives a bond dealer a check for the amount. After the check has cleared
A) reserves remain unchanged because the increase of reserves at the dealer's bank are offset by an increase in reserves at the Fed. B) reserves have risen by the amount of the check because the Fed clears the check by increasing the amount of the bank's deposits with the Fed. C) reserves have fallen by the amount of the check because the Fed clears the check by reducing the bank's deposits at the Fed. D) reserves have fallen by the amount of the reserves times the reserve ratio and the money supply increases by the difference between the amount of the check and the increase in the reserves.
Transfer payments are subtracted from national income to get to personal income
Indicate whether the statement is true or false
The similarity between markets for common resources and markets with externalities is that:
A. the equilibrium quantity is too high in terms of society. B. the price that competitive firms charge does not capture the true costs and benefits of consumption. C. government involvement is needed to reach an efficient outcome. D. generally we get an oversupply at market.
The Consumer Price Index (CPI) excludes goods imported from other countries and consumed by residents of the United States
a. True b. False