How does the Federal Reserve inject reserves into the banking system?
A. By moving reserves between the accounts of different banks
B. By creating new money it uses to buy financial assets
C. By creating new money it lends directly to households and businesses
D. By creating new financial assets it sells in the open market
Ans: B. By creating new money it uses to buy financial assets
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Demand in the apricot market can be expressed as P=100-Q. Further, the supply function in the apricot industry is P=10+Q. If a social planner specifies that 30 units be produced, is that level of production efficient? Can you propose a more efficient level of production? Explain why your proposed level is better than that of the social planner.
What will be an ideal response?
A decline in the expected inflation rate causes the demand for money to ________ and the demand curve to shift to the ________, everything else held constant
A) decrease; right B) decrease; left C) increase; right D) increase; left
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. At the end of the day, Jerry could have produced:
A. 10 dishes and 5 fences. B. 12 dishes and 6 fences. C. 14 dishes and 7 fences. D. 6 dishes and 4 fences.
What does it mean that “innovators try to anticipate the future”? What are the economics consequences of this effort?
What will be an ideal response?