When the Fed buys government securities
A) reserves increase, leading to a decrease in the money supply by an amount more than the purchase of the government securities.
B) reserves increase, leading to a increase in the money supply by an amount more than the purchase of the government securities.
C) reserves decrease, leading to a increase in the money supply by an amount more than the purchase of the government securities.
D) reserves decrease, leading to a decrease in the money supply by an amount more than the purchase of the government securities.
B
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The reason that supply and demand tend to be more price elastic over longer time periods is because
A) it takes time for households and businesses to adjust to price changes. B) some goods have longer shelf life and are reordered less often. C) firms incur costs in changing the price of goods on their shelves. D) the feedback loop from buyers to sellers takes time.
An increase in aggregate supply will cause the price level to:
a. rise and GDP to rise b. rise and GDP to fall. c. rise and the unemployment rate to fall. d. fall and GDP to rise. e. fall and the unemployment rate to rise.
Last year the Jones family earned $40,000. This year their income is $42,000. In an economy with an inflation rate of 10 percent, which of the following is correct?
A. The Jones' nominal income and real income have both fallen. B. The Jones' nominal income and real income have both risen. C. The Jones' nominal income has increased and their real income has fallen. D. The Jones' nominal income has decreased and their real income has risen.
Which of the following is a TRUE statement about a monopoly?
A. A monopoly does not necessarily earn positive economic profits. B. As long as the demand curve slopes down, a monopoly can always find some price-output combination that generates positive economic profits. C. A monopoly must earn an above-normal profit to stay in business. D. As long as there are barriers to entry, a monopoly can always find some price-output combination that generates positive economic profits.