A reduction in the federal funds rate could be caused by an:
A. increase in the reserve requirement.
B. increase in the discount rate.
C. open market sale of government securities.
D. increase in the excess reserves of the banking system.
Answer: D
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A negative externality is
A. a type of tax. B. a type of subsidy. C. a type of money price. D. linked to external costs. E. linked to external benefits.
The natural rate of unemployment worsens if:
a. Labor force mobility worsens. b. Capital markets become more competitive. c. A nation's resource endowments expand. d. Real wages become more flexible. e. None of the above.
Hannah and Marla plan to drive cross-country in Marla’s car after graduation and split the estimated $300 gas costs and 30 hours of driving. Their friend Sarah asks to join the trip and split the costs. Which of the following accurately describes the difference between average and marginal costs of adding a third traveler to the trip?
a. Average costs are increased from $300 to $450; marginal costs are reduced to 10 hours of driving per person. b. Average costs of travel remain the same; marginal costs are increased by Sarah’s share of beverages and snacks. c. Average costs fall from $150 to $100 per person; marginal costs are minimal and offset by Sarah’s help with driving. d. Average costs are increased by adding a third person; marginal costs are unchanged because the car is already going.
Imagine two countries, Zorba and Anduluvia. Zorba is producing everything at a lower resource cost than Anduluvia. If the two countries trade what is the reason?
What will be an ideal response?