Refer to Scenario 2. Once the full impact of the Fed's open market sale works its way through the banking system, what is the maximum change on the money supply as a result of these two events?
A) Money supply rises by $5,000.
B) Money supply rises by $500,000.
C) Money supply falls by $50,000.
D) Money supply falls by $500,000.
Ans: D) Money supply falls by $500,000.
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Cash in a commercial bank's vault is not part of the money supply
a. True b. False
If marginal revenue exceeds marginal cost, then a profit-maximizing perfectly competitive firm should:
a. increase output. b. decrease output. c. leave output unchanged. d. increase price.
How does macroeconomics differ from microeconomics?
A. The study of the opportunity cost of nations versus the opportunity cost of individuals B. The underlying principles C. The use of abstractions and models D. The use of aggregate indicators over market resource allocation
What is core inflation? Why is it used?
What will be an ideal response?