If r is the required reserve ratio, which of the following is the simple money multiplier?
a. r
b. 1/(1 – r)
c. 1 – r
d. 1/r
e. 2r
d
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The price elasticity of demand for gasoline is estimated to be -0.2. Two million gallons are sold daily at a price of $3. Use this information to calculate a demand curve for gasoline assuming it is linear
What will be an ideal response?
Government imposed price controls often lead to
A) illegal trades of the good. B) the most efficient use of resources. C) the equilibrium solution in terms of price and quantity. D) maximization of profits.
If a firm in a perfectly competitive market sells 100 units of output and total revenues are $500, which of the following statements are true? (i) Marginal revenue equals $5. (ii) Average revenue equals $5. (iii) Price equals $5
a. (i) only b. (iii) only c. (i) and (ii) only d. (i), (ii), and (iii)
Prime Minister Emma Bigshot urges passage of a bill to reduce unemployment benefits from very generous levels in her country. She also urges her country's central bank to raise the rate at which the money supply is increasing. In the long run which, if either, of these policies will reduce the unemployment rate?
a. both reducing the generosity of unemployment benefits and raising the rate at which the money supply is increasing b. reducing the generosity of unemployment benefits but not raising the rate at which the money supply is increasing c. raising the rate at which the money supply is increasing, but not reducing the generosity of unemployment benefits d. neither reducing the generosity of unemployment benefits nor raising the rate at which the money supply is increasing