Which one of the following policies might the Fed initiate if it wanted to increase the money supply?
a. sell government securities
b. increase the reserve requirement
c. increase the discount rate
d. decrease the reserve requirement
d
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The most significant cost to a central bank of reducing unemployment is the costs
a. incurred by printing and distributing new money. b. of lower output. c. of higher real wages. d. of inflation.
Which of the following would likely be traded in a monopolistically competitive market?
a. Electricity b. Airline Tickets c. Pizza d. Wheat e. Water
In the most basic model presented in the text, when aggregate expenditures cross the 45-degree line,
a. saving equals intended investment b. saving is greater than intended investment c. saving is less than intended investment d. saving equals consumption e. saving equals inventories
Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. An economist would calculate the total profit for one birdhouse to be
a. $7. b. $11. c. $12. d. $15.