Jim is haggling with a car dealer on the price of a used car. During the bargaining, Jim discovers that the car has a significant number of scratches which he had not noticed before. The total surplus from the sale has
a. Increased
b. Decreased
c. Was not affected
d. All of the above
b
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Goods or services that can be produced only by using unique or rare productive resources tend to have a low elasticity of supply
Indicate whether the statement is true or false
Each member of the Board of Governors of the Fed: a. is from the minority of the FOMC
b. can have twelve presidential appointments. c. is authorized to set reserve requirements by the Bank Acts of 1933 and 1935. d. serves one nonrenewable term. e. is elected by the member banks which own the Federal Reserve.
Which one of the following must a central bank must be concerned about driving most of the country’s existing banks into bankruptcy?
a. a large and unexpected exchange rate appreciation b. a large and unexpected interest rate increase c. a large and unexpected exchange rate depreciation d. a large and unexpected increase in foreign investments
If a recessionary GDP gap exists, which of the following sets of policies should the Federal Reserve Board pursue?
A. Sell government securities, lower the discount rate, and lower the required reserve ratio. B. Sell government securities, lower the discount rate, and raise the required reserve ratio. C. Buy government securities, raise the discount rate, and lower the required reserve ratio. D. Buy government securities, lower the discount rate, and lower the required reserve ratio.