Assume a nation has a fixed exchange rate, and the central bank increases the required reserve ratio. What is the net effect on the monetary base (given fixed exchange rates)? Answer assuming all the adjustments have worked their way through the macroeconomic system, and it is in equilibrium
a. The monetary base rises.
b. The monetary base falls.
c. The monetary base is not affected in this example.
d. The monetary base can not change because of the "Impossible Trilogy."
e. The change in the monetary base is ambiguous.
.A
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Figure 6-2
In Figure 6-2, the price elasticity of demand (dropping all minus signs) is ____ between P = 4 and P = 6 than between P = 10 and P = 12 because between the lower set of prices the percentage change in price is ____.
A. smaller; smaller B. smaller; greater C. greater; smaller D. greater; greater
Refer to Figure 4-5. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing the portion of consumer surplus transferred to producers as a result of the price floor?
A) A + B B) B C) A D) B + C
The short-run equilibrium output of a competitive firm is found by equating marginal cost with price.
Answer the following statement true (T) or false (F)
For firms operating in a perfectly competitive market, price must always be greater than marginal revenue
a. True b. False Indicate whether the statement is true or false