According to the classical economists, if there were substantial unemployment, there would be a fall in _____, _____, and _____.
Fill in the blank(s) with the appropriate word(s).
wages; prices; interest rates
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What happens when the Fed aims to change interest rates?
A) It asks Congress to legislate new interest rates. B) It buys or sells government bonds on the open market to achieve the desired rate. C) It buys or sells dollars on the foreign exchange market to achieve the desired rate. D) It announces a new discount interest rate.
Sarah buys little stuffed animals for $5 each. They come in different varieties. If the producer stops making (retires) a certain variety, a stuffed animal of that variety will be worth $100; otherwise it is worth $0. There is 50% chance that any variety will be retired. What is the value to Sarah of knowing ahead of time whether a variety will be retired?
A) $50 B) $5 C) $2.50 D) $0
The total market value of all final goods and services produced by resources owned by a country, regardless of where production takes place is
A. national income. B. gross domestic product. C. gross national product. D. gross private domestic investment.
With a reserve ratio of 10%, the banking system can create ________ with each dollar of deposits.
A. $5 B. $10 C. $2 D. $1