Suppose the quality of service provided by a newly regulated firm begins to deteriorate soon after regulation is enforced. Which of the following types of regulation is most likely being used?
A. Output regulation.
B. Social regulation.
C. Profit regulation.
D. Price regulation.
Answer: A
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Seth is a competitive body builder. He says he has to have his 12-oz package of protein powder to "feed his muscles" every day. On the basis of this information, what can you conclude about his price elasticity of demand for protein powder?
A) It is perfectly inelastic. B) The price elasticity coefficient is 1. C) It is elastic. D) It is perfectly elastic.
If the required reserve ratio in an economy is equal to 10 percent and Bank A receives $100,000 as deposits, then Bank A would _____ in order to make profits
a. keep $90,000 in reserves and loan out $10,000 b. keep $10,000 in reserves and loan out $90,000 c. keep the entire amount in reserves and charge a high fee on withdrawal d. loan out the entire amount at the prevailing rate of interest
When economists say an individual possesses a "positive rate of time preference," they mean that she prefers to
a. save rather than consume. b. invest now rather than in the future. c. consume goods and services in the future rather than now. d. consume goods and services now rather than in the future.
If expected inflation is 2%, the real interest rate is 7% and the economy is growing at a rate of 4%, the nominal interest rate is equal to
a. 9% b. 5% c. 7% d. 6% e. none of the above