If the Fed buys $20 billion of U.S. bonds in the open market and the reserve requirement is 5 percent, M1 will eventually
A. Decrease by $400 billion.
B. Decrease by $100 billion.
C. Increase by $100 billion.
D. Increase by $400 billion.
Answer: D
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A short-run equilibrium occurs
A) at the intersection of the short-run aggregate supply curve and the aggregate demand curve. B) at the real GDP associated with full employment. C) at the intersection of the short-run aggregate supply curve and the long-run aggregate supply curve. D) at the intersection of the long-run aggregate supply curve and the aggregate demand curve.
A monopsony maximizes its profit by hiring the level of employment that sets
A) labor supply equal to labor demand. B) the value of marginal product equal to the wage. C) the value of marginal product equal to the marginal cost of labor. D) the value of marginal product equal to the demand for labor.
A local store noticed that when it increased the price of milk from $2.50 to $3.50 per gallon, it sold the same amount of milk per week (165 gallons). Since everything else remained the same, we would say the
a. demand for milk is perfectly elastic b. demand for milk is elastic c. demand for milk is perfectly inelastic d. demand for milk is unitary elastic e. law of supply does not apply in this situation
Something other than exploiting cheap foreign labor must be driving international trade
a. True b. False Indicate whether the statement is true or false