When the Fed sells government securities, it
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans
b. raises the cost of borrowing from the Fed, discouraging banks from making loans
c. increases the amount of excess reserves that banks hold, encouraging them to make loans
d. increases the amount of excess reserves that banks hold, discouraging them from making loans
e. decreases the amount of excess reserves that banks hold, discouraging them from making loans
E
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Using the data in the above table, if the government sector runs a deficit of $250 billion and net exports equal -$500 billion, then saving must equal
A) $450 billion. B) $250 billion. C) $1,350 billion. D) $400 billion.
A free-rider problem exists if
A) those consuming the good pay more than the cost of providing the good so that the producer's profits increase ("free ride") as a result of the overpayment. B) those consuming the good pay nothing for it. C) two consumers can jointly consume a good, which lowers the price per person. D) a firm can obtain technology at a fair price.
The United States and Brazil are competitors in the world soybean market. In the late 1960s and early 1970s, the Brazilian government developed regulations designed to encourage Brazilian soybean production and exports
An unanticipated effect of the Brazilian regulations was to stimulate U.S. soybean production and exports. The type of economic analysis that would explain and predict these effects is called A) closed economy macroeconomics. B) international economics. C) partial equilibrium analysis. D) full market analysis. E) general equilibrium analysis.
_______________ —a term referring to the government practice of enacting laws to regulate prices instead of letting market forces determine prices.
a. Price ceiling b. Price floor c. Price control d. Subsidies