The Fed purchases $200 worth of government bonds from the public. The reserve requirement is 12.5 percent, people hold no currency, and the banking system keeps no excess reserves. The U.S. money supply eventually increases by
a. $25.
b. between $200 and $300.
c. $1,600.
d. $2,500.
c
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If the average price of a car suddenly changes from $15,000 to $25,000, larger, more remote stores with lower prices are ________ to have a(n) ________ in the number of customers.
A) not likely; change B) likely; decrease C) likely; increase D) not likely; decrease
A market demand schedule for a product indicates that
A) as the product's price falls, consumers buy less of the good. B) there is a positive relationship between price and quantity demanded. C) as a product's price rises, consumers buy more of the good. D) there is a negative relationship between price and quantity demanded.
A perfectly competitive firm maximizes profits or minimizes losses in the short-run by producing at the output level at which:
a. marginal revenue equals marginal cost. b. total revenue equals total cost. c. total revenue is at a maximum. d. none of these.
If an increase in investment causes an increase in real output beyond the full-employment level, the result will be
A. An increase in undesired inventories. B. An increase in the recessionary GDP gap. C. Cost-push inflation. D. Demand-pull inflation.