Suppose all prices increase by 10 percent in the year while the total sales of HDTVs remain constant. This is
A) a violation of the law of demand since fewer HDTVs should be purchased at a higher price.
B) a violation of the law of demand since more HDTVs should have been purchased with higher incomes.
C) not a violation of the law of demand since the relative price of HDTVs did not change.
D) not a violation of the law of demand since the law of demand does not apply to expensive goods like HDTVs.
C
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to increase the money supply by $400 billion to drive down interest rates and stimulate the economy. Assuming that the money multiplier is operating to full effect, to accomplish the desired increase, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks B. sell $20 billion of U.S. securities to the banks C. buy $20 billion of U.S. securities from the banks D. buy $40 billion of U.S. securities from the banks
______________ refers to the fraction of your medical bill that you, rather than your insurer, must cover.
A. Co-insurance B. Co-pay C. Deductible D. None of the above is correct.
__________ and __________ quotation are also referred to as American and European Quotes.
Fill in the blank(s) with the appropriate word(s).
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline