Monopoly is a market structure in which:
A. a few firms dominate the market.
B. one firm makes up the entire market.
C. many firms produce identical products.
D. many firms produce differentiated products.
Answer: B
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A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. Assume that the economy is initially in equilibrium. Refer to Scenario 10.2. What is the marginal propensity to save of this economy?
a. 0.2 b. 0.3 c. 0.7 d. 0.9 e. 0.6
In the economy of Brightland, the commercial banks have deposits of $600 billion. Their reserves are $60 billion. All reserves are in deposits with the Central Bank and the commercial banks hold no excess reserves
There is $120 billion in Central Bank notes outside the banks, and there are no coins. a) What is the economy's monetary base? b) What is the quantity of money in the economy? c) Calculate the money multiplier. d) Suppose the Central Bank of Brightland undertakes an open market purchase of securities of so that the monetary base increases by $5 billion. By how much will the quantity of money change?
How does adverse selection in financial markets affect the method by which firms raise funds?
What will be an ideal response?
Which of the following is the largest component of federal spending today?
A) income security B) Social Security C) Medicare D) national defense