Rising inflationary pressure caused the U.S. to tighten its monetary policy at the end of the 1960s
As a result, market interest rates rose above the Regulation Q ceiling and American banks found it impossible to attract time deposits for re-lending. How did the banks get around this problem? A) by setting their own interest rates and then using better business as compensation for government regulations
B) by borrowing funds from European branches, which faced no restriction on the interest they could pay on Eurodollar deposits
C) by pushing through new legislation that nullified Regulation Q
D) by creating subsidiary branches in foreign countries
E) by waiting to trade time deposits until Regulation Q no longer applied
B
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A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. If the firm sells each computer for $650, then how many hours a day should the firm employ Pam to maximize its net benefit from her employment?
A. 4 hours B. 3 hours C. 2 hours D. 1 hour
Suppose that, last year, the price of peanuts fell and the quantity sold increased. Use supply and demand analysis to explain how these changes could have occurred
What will be an ideal response?
What happens to the marginal product (MP) of labor when the market price of the good produced increases?
a. Increases proportional to price. b. Decreases proportional to price. c. Stays the same. d. Falls because quantity demanded falls. e. Rises because quantity demanded falls.
Explain the difference between the international trade effect, which leads to a movement along a given AD curve, and an increase in foreign incomes, which leads to a shift to a new AD curve