When the Fed conducts open-market purchases,
a. banks buy Treasury securities from Fed, which increases the money supply.
b. banks buy Treasury securities from the Fed, which decreases the money supply.
c. it buys Treasury securities, which increases the money supply.
d. it buys Treasury securities, which decreases the money supply.
c
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Refer to Table 23-4. Given the consumption schedule in the table above, the marginal propensity to save is
A) 0.3. B) 0.4. C) 0.5. D) 0.6.
If everyone in an economy buys and sells goods at market-wide prices:
A. people will pay the same prices, so everyone's marginal rate of substitution will be the same. B. people will pay the same prices, but will have different marginal rates of substitution. C. people will pay different prices, but will have the same marginal rates of substitution. D. people will pay different prices and therefore will have different marginal rates of substitution.
An "unemployment spell" is a period during which:
A. an unemployed individual leaves the labor force and then returns. B. the unemployment rate exceeds 15 percent. C. an individual is continuously unemployed. D. the unemployment rate is less than 10 percent.
In 2003, the top 20 percent, or wealthiest fifth, of U.S. households earned _____.
(A) About the same as the bottom four fifths combined. (B) Less than the bottom four fifths combined. (C) More than the bottom four fifths combined. (D) Less than the bottom three fifths combined.