The term investment, in the language of economists, refers to the purchases of stocks, bonds, and other financial instruments
a. True
b. False
B
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The reserve ratio is 10 percent and all loan proceeds are deposited in transactions accounts. A bond dealer has $100 million in deposits, $8 million in vault cash, and $7 million in deposits at the Fed
The Fed sells $1 million in securities to the bond dealer. As a result, of this transaction alone A) the money supply falls by $1 million and total reserves rise by $1 million. B) the money supply falls by $1 million and total reserves fall by $1 million. C) the money supply rises by $1 million, total reserves fall by $900,000. D) the money supply rises by $1 million, but reserves do not change.
Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?
A) The price would increase, the demand would increase, and the supply would decrease. B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase. C) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease. D) The price would increase, quantity demanded would increase, and quantity supplied would decrease.
Increases in investment spending cause interest rates to increase. As a result,
a. households will demand more loanable funds b. households will save a smaller fraction of their incomes c. households will voluntarily decrease their consumption spending d. the investment curve will shift leftward e. firm will receive greater profits from households who are consuming goods
In order to measure what a country produces, we:
A.) Summarize total output in physical terms. B.) Count units of output. C.) Count the weight of different products. D.) Summarize the monetary value of output.