A decrease in the excess reserves banks want to hold, together with people depositing currency into their demand deposit accounts, would:
a. increase the money supply
b. decrease the money supply.
c. leave the money supply unchanged.
d. have an indeterminate effect on the money supply.
a
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An increase in the price level ________ real wealth, which causes consumption to ________
A) lowers; decrease B) raises; decrease C) lowers; increase D) raises; increase
Internal balance describes
A) equilibrium in the goods market. B) a desired level of trade or capital flows. C) where the IS and BP curve intersect. D) a domestic rate of growth consistent with a low unemployment rate.
In the short run, in a perfectly competitive market, a firm will shut down if
A) P < AVC for all levels of output. B) P < ATC for all levels of output. C) ATC > P > AVC for all levels of output. D) P > AFC for all levels of output.
At the level of output where marginal revenue equals marginal cost, assume that the price of a competitive firm's product is between the firm's average total cost curve and its average variable cost curve. In this case the firm would
A. decrease output to reduce the costs. B. continue to operate in the short run. C. shut down. D. increase output to increase profit.