The two functions that are critical to the key role that commercial banks play in stabilizing the economy are accepting deposits and making loans
Indicate whether the statement is true or false
TRUE
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The OPEC oil shocks in 1973-1974 are an example of:
A) favorable supply shock, shifting the short-run aggregate supply curve rightward. B) favorable supply shock, shifting the short-run aggregate supply curve leftward. C) adverse supply shock, shifting the short-run aggregate supply curve rightward. D) adverse supply shock, shifting the short-run aggregate supply curve leftward.
One practical implication of a kinked market supply curve is that:
A) producer surplus is not defined at the kink point. B) the MC = MR rule does not hold at the kink point. C) the market supply elasticity for a price increase may be different than the market supply elasticity for a price decrease at the kink point. D) All of the above are true.
If higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the United States, which of the following will be most likely to occur?
a. U.S. employment will increase. b. The unemployment rate of the United States will decline. c. U.S. exports will increase because foreigners will want to buy more from U.S. producers. d. U.S. exports will decline because foreigners will be earning fewer of the dollars needed to purchase goods and services from Americans.
Suppose we were analyzing the Turkish lira per euro foreign exchange market. If Turkey's central bank intervenes to reduce the value of the euro, then:
a. The supply of euros in the foreign exchange market rises, and Turkey's monetary base rises. b. The supply of euros in the foreign exchange market rises, and Turkey's monetary base falls. c. The demand for euros in the foreign exchange market rises, and Turkey's monetary base rises. d. The demand for euros in the foreign exchange market rises, and Turkey's monetary base falls. e. The demand for euros in the foreign exchange market rises, and Turkey's monetary base remains unchanged.