Suppose that in a PPF graph, wheat is on the vertical axis and jets are on the horizontal axis. Moving down along the PPF, the
A) number of jets increases and the opportunity cost of jets decreases.
B) number of jets increases and the opportunity cost of jets increases.
C) opportunity cost of jets and wheat both increase.
D) amount of wheat increases and the opportunity cost of wheat increases.
E) amount of wheat increases and opportunity cost of wheat decreases.
B
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When the Fed buys $100 million of securities from a commercial bank, the
A) monetary base increases. B) money supply decreases. C) bank's reserves decrease. D) required reserve ratio decreases. E) bank is risking its depositors' money.
The marginal rate of technical substitution (MRTS) along an isoquant:
A) is equal to the price ratio at all points along an isoquant. B) is equal to the ratio of the marginal utilities of the two goods. C) is equal to the ratio of the marginal products of the two inputs. D) remains constant as we alter the combinations of the two inputs.
When the fed wants to end a recession, they will act to ___ interest rates and ____ the money supply
a. increase; increase b. increase; decrease c. decrease; decrease d. decrease; increase
Marginal propensity to consume (MPC) is the fraction of extra income that a household spends on consumption.
Answer the following statement true (T) or false (F)