When the Fed lowers the federal funds rate, the quantity of money ________ and the supply of loanable funds ________
A) increases; does not change
B) decreases; increases
C) increases; decreases
D) increases; increases
E) decreases; decreases
D
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Suppose you learn that in 1900, households spent about 40 percent of their budget on food, and today, they spend about 10 percent of their budget of food. All else equal, this suggests that the price elasticity of demand for food:
A. is probably negative. B. is probably higher now than it was in 1900. C. is probably lower now than it was in 1900. D. has always been very high.
Refer to Figure 7-3. On the above graph, identify the market equilibrium price and quantity, the efficient equilibrium price and quantity, and the value of the deadweight loss resulting from too few people receiving vaccinations
What will be an ideal response?
In the short run, there are large and persistent deviations between actual exchange rates and exchange rates predicted using purchasing power parity because of:
a. Discretionary monetary policy. b. International capital flows could cause short-term differences. c. Discretionary fiscal policy. d. Widely different inflation rates in the two nations. e. None of the above.
Which one of the following is not a danger of experimenting with pricing for an oligopoly?
A. Firms matching price reductions. B. The uncertainty of competitor response. C. Product differentiation. D. Retaliation.