If the Central Bank wants to increase the supply of money in the economy, it should:
(a) Raise the reserve requirement.
(b) Raise the rate of discount.
(c) Buy government bonds in the market.
(d) Both (a) and (b) are correct.
Answer: (c) Buy government bonds in the market.
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Firms will hire additional workers as long as the wage:
A. is greater than the marginal product of labor. B. is less than the value of the marginal product of labor. C. equals the marginal product of labor. D. is less than the marginal product of labor.
The "invisible hand" refers to
a. the marketplace guiding the self-interests of market participants into promoting general economic well-being. b. the fact that social planners sometimes have to intervene, even in perfectly competitive markets, to make those markets more efficient. c. the equality that results from market forces allocating the goods produced in the market. d. the automatic maximization of consumer surplus in free markets.
To economists, land includes all ______________, or gifts of nature, used in the production process.
a. investment b. natural resources c. input resources d. capital
With a given level of money income, when the price of a product that a consumer buys declines, the purchasing power of your money income
A) decreases. B) increases. C) is unchanged. D) can increase or decreases depending on the goods being consumed.