Immediately after the Federal Reserve buys government securities,
A) bank excess reserves rise.
B) bank excess reserves fall.
C) bank capital rises.
D) bank capital falls.
A
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According to the Quantity Theory of Money (Chapter 3), the increase in the money supply from $39.7 billion in 1940 to $99.2 billion in 1945 should have fueled strong inflation. However, it did not because
(a) the World War II (1941–45) (WWII) economy was operating below full employment levels of production. (b) the WWII economy was operating at full employment levels of production. (c) the WWII economy was operating above full employment levels of production. (d) price controls prevented the surge in prices across the economy.
Refer to the above table. What does the marginal revenue product equal when 28 workers are hired a week?
A. $1040 B. $7.50 C. $210 D. $900
The financial institutions play an important role in transferring the savings of the individuals to the investments by businesses. Which of the following correctly states this transfer?
A)banks collect the savings and lend the funds to the government who in turn redistribute it through different kinds of subsidies. B) Banks collect the savings and invest it in the stock market. C)Banks collect the savings, rewarding the savings by interest.and dividend payments and, lend the funds to businesses who in turn buy equipment, factories and capital goods. D) financial institutions do not have a major role in this process.
If personal income taxes and business taxes increase, then this will:
A. Increase aggregate demand and aggregate supply B. Decrease aggregate demand and aggregate supply C. Decrease aggregate demand and increase aggregate supply D. Increase aggregate demand and decrease aggregate supply