In the market for bank reserves, a reduction in the required reserve ratio will cause
A. a reduction in the demand for reserves.
B. a reduction in the federal funds rate.
C. an increase in the equilibrium quantity of reserves.
D. all of these.
Answer: D
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Suppose that many people who earn a living designing apps decide they can make more money selling honey and switch occupations. How will this change affect the number of apps supplied by producers?
A. supply decreases B. supply does not change C. supply increases
Consider the utility function 
. If 
, the elasticity of substitution is equal to 1.
The elasticity of substitution for CES utility functions is 
.
Answer the following statement true (T) or false (F)
If a regulatory agency forces a natural monopolist to stop charging monopoly prices and start charging competitive prices,
a. taxpayers will have to subsidize the firm b. price will fall below AVC c. the monopolist will shut down d. stockholders will benefit e. quantity produced will increase
A fixed exchange rate system encourages speculators to attack weaker currencies
a. True b. False Indicate whether the statement is true or false