When the Fed conducts an open market purchase, the first round changes in the money creation process are that excess reserves ________, bank deposits ________, and the quantity of money ________
A) decrease; increase; does not change
B) do not change; increase; increases
C) increase; increase; increases
D) increase; do not change; increases
E) decrease; decrease; decreases
C
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A group of firms, operating in collusion, incur costs of production of $15 per unit. The price that currently maximizes their profit is $19 . Knowing that potential competitors could enter the market with production costs of $17 per unit, what price are the colluders likely to charge? Why?
A country's level of economic freedom is influenced by
A) freedom to trade internationally. B) the relative size of government expenditures, taxes and enterprises. C) the even-handedness of the court system and security of property rights. D) all of the above.
What will cause the equilibrium point to move from E1 to E2?
a. a downward movement, or decrease, in price from P1 to P2
b. an upward movement, or increase, in price from P2 to P1
c. a leftward movement, or decrease, in quantity from Q2 to 0
d. a rightward movement, or increase, in quantity from Q2 to Q1
Which characteristic of a monopolistically competitive firm causes it to have zero profits in the long run?
A. There are no barriers to entry. B. The firm has a slight control of its price. C. The firm sells a differentiated product. D. All of these causes the monopolistically competitive firm to have zero profits in the long run.