Suppose that the current money market equilibrium features an interest rate of 5 percent and a quantity of $2 trillion. If the Fed raises the discount rate, which of the following is most likely to be the new money market equilibrium?
A. An interest rate of 6 percent and a quantity of $1.5 trillion.
B. An interest rate of 5 percent and a quantity of $2 trillion.
C. An interest rate of 4 percent and a quantity of $2.5 trillion.
D. An interest rate of 3 percent and a quantity of $3 trillion.
Answer: A
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Answer the following statement(s) true (T) or false (F)
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The constitutional right to enact usury laws in the United States
a. results in excessive interest paid by borrowers b. represents a price floor for borrowed money c. reinforces our belief in the market system d. still belongs to state governments e. does not exist
Which of the following countries meets or exceeds the U.N.'s Millennium Aid Goal of 0.7 percent of donor country GDP?
A. Australia. B. Norway. C. The United Kingdom. D. Japan.
Which of the following elements is typical in oligopoly?
a. low economies of scale b. high start-up costs c. many small sellers d. low concentration ratios