The above figure shows the market for steel ingots. If the market is competitive, then
A) the socially optimal quantity of steel is zero.
B) the socially optimal quantity of steel of 50 units is produced.
C) the socially optimal quantity of steel of 100 units is produced.
D) more than the socially optimal quantity of 50 units of steel is produced.
D
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Assuming all else equal, if a bank expects a bank run in the future:
A) there will be an upward movement along its demand curve for reserves. B) its demand curve for reserves will shift to the left. C) there will be a downward movement along its demand curve for reserves. D) its demand curve for reserves will shift to the right.
If the economy is experiencing less than full-employment, the Keynesian model recommends that the government
a. do nothing to stimulate the economy. b. undertake expansionary fiscal policy to stimulate aggregate demand. c. undertake expansionary fiscal policy to stimulate aggregate supply. d. balance the budget to stimulate aggregate demand.
A line is parallel to the vertical axis. The slope of the line is
A) zero. B) infinite. C) indicative of an inverse relationship between two variables. D) indicative of a direct relationship between two variables. E) b and d
A bank's assets tend to be long-term while its liabilities are short-term. Therefore, when interest rates rise, the value of the bank's assets:
A. will decrease by more than the value of its liabilities. B. increases and the value of its liabilities decreases. C. decreases and the value of its liabilities increases. D. increases by more than the value of its liabilities.