If a central bank increases the money supply in response to an adverse supply shock, then which of the following quantities moves closer to its pre-shock value as a result?
a. both the price level and output
b. the price level but not output
c. output but not the price level
d. neither output nor the price level
c
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In the circular flow model, which of the following is on the buying side in the goods market?
i. firms ii. households iii. federal, state, and local governments A) i only B) ii only C) iii only D) i and ii E) ii and iii
Refer to the figure above. If this were a voluntary restraint agreement, the welfare costs to the importing country would be
A) $14,000. B) $18,000. C) $38,000. D) $60,000.
Explain why the current abatement levels for the two sources do not achieve cost effectiveness.
Suppose that there are only two stationary sources in a given air quality region. The first source has been in existence for several years, while the second source is new. The following functions represent marginal abatement costs (MAC) for each polluting source: MACEX = 10.0 + 0.7A EX, MACN = 9.2 + 0.5A N, whereAEX is the percentage abatement level for the existing source, and AN is the percentage abatement level for the new source. Assume that the aggregate abatement standard (i.e., for the region as a whole) is set at 40 percent and that the two firms’ current abatement levels areAEX = 10 and AN = 30.
If checkable deposits in Bank A total $620 million and the required reserve ratio is 9 percent, then required reserves at Bank A equal
A) $564.2 million. B) $468 million. C) $28.8 million. D) $55.8 million. E) $558 million.