What's the most common way for a central bank to reduce the money supply?
A. Collect higher taxes
B. Sell bonds to the public
C. Buy bonds from the public
D. Buy bonds from the government
Answer: B
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An economy has two workers, Paula and Ricardo. Everyday they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one shirt?
A. ½ computer B. 4 computers C. 2 computers D. ¼ computer
Suppose that the economy is producing above potential GDP and the Fed implements the correct change in monetary policy, but not until after the economy has passed the peak of the boom. Then
A) the Fed's contractionary policy will result in too small of a decrease in GDP. B) the Fed's expansionary policy will result in too small of a decrease in GDP. C) the Fed's contractionary policy will result in too large of a decrease in GDP. D) the Fed's expansionary policy will result in too large of an increase in GDP.
A rise in Durable Goods Orders should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
Who makes decisions and trade-offs in the face of scarce resources?
A. Governments B. Individuals C. Businesses D. All of these are correct.