Suppose The United Bank of Glassen has loaned $250 to Mr. Joseph Langdon for his business. Mr. Langdon repays the loan with a check written against his own bank, Rexan Bank. Which of the following is likely to happen as a result of this transaction?
a. The reserves at the United Bank of Glassen will fall
b. The reserves at Rexan Bank will increase.
c. Checkable deposits at Rexan Bank will increase.
d. Rexan Bank will make more loans than before.
e. The reserves and checkable deposits of Rexan Bank will decrease.
e
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Contractionary fiscal policy _______________ Real GDP ______________ in an open economy than in a closed economy
A) raises; more B) raises; less C) lowers; more D) lowers; less
What is the likely effect in an economy when total spending is too high?
a. inflation b. tax decreases c. unemployment d. efficiency
We say that a good has elastic demand whenever the absolute value of the price elasticity of demand is greater than one. A one percent change in price therefore causes
A) exactly a one percent change in the quantity demanded. B) a change of less than one percent in the quantity demanded. C) a greater than one percent change in quantity demanded. D) a change that cannot be determined based on one percent.
Refer to the diagram, where variable inputs of labor are being added to a constant amount of property resources. The total output of this firm will cease to expand:
A. if a labor force in excess of Q 1 is employed.
B. if a labor force in excess of Q 2 is employed.
C. if a labor force in excess of Q 3 is employed.
D. only if the marginal product curve becomes negative at all levels of output.