Based on the above table, an open market operation in which the Fed purchased $200,000 of government securities would
A. create a reserve deficiency for the banking system.
B. lead to a maximum potential expansion of the money supply of $2 million.
C. cause demand deposits to fall by $200,000.
D. lead to a maximum potential expansion of the money supply of $200,000.
Answer: B
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If Alberto Reyes increases his work hours when his real wage increases, then
A) the substitution effect of the wage increase outweighs the income effect. B) the income effect of the wage increase outweighs the substitution effect. C) leisure is an inferior good to Alberto. D) the substitution effect of the wage increase is completely offset by the income effect.
Which of the following federal farm programs was successful in reducing agricultural surpluses?
a. The Agricultural Act of 1948 b. The Emergency Act of 1978 c. The Emergency Feed Grain Bill of 1961 d. The Soil Bank Act of 1956
Refer to the information provided in Figure 4.1 below to answer the question(s) that follow.
Figure 4.1Refer to Figure 4.1. Assume that initially there is free trade. If the United States then imposes a 10-cent tax per apple,
A. the quantity of apples supplied by U.S. firms will increase by 2 million apples per day. B. the price of apples in the United States will increase to 40 cents per apple. C. the quantity of apples demanded will be reduced by 2 million apples per day. D. all of the above
A third-degree price discriminating monopolist can sell its output either in the local market or on an internet auction site (or both)
After selling all of its output, the firm discovers that the marginal revenue earned in the local market was $20 while its marginal revenue on the internet auction site was $30. To maximize profits the firm should A) have sold more output in the local market and less at the internet auction site. B) do nothing until it acquires more information on costs. C) have sold less output in the local market and more on the internet auction site. D) sell less in both markets until marginal revenue is zero. E) sell more in both markets until marginal cost is zero.