If the demand curve for a life-saving medicine is perfectly inelastic, a reduction in supply will cause the equilibrium price to:
a. rise and the equilibrium quantity to fall
b. rise and the equilibrium quantity to stay the same.
c. rise and the equilibrium quantity to rise.
d. stay the same and the equilibrium quantity to fall.
b
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When Federal Reserve Banks add to their holdings of government securities,
A) commercial banks must reduce their net lending. B) commercial bank reserves increase. C) the Fed is extending less credit to the economy. D) the stock of money declines.
In 2009, nominal GDP was $14,050 billion and M1 was $1,587 billion. Velocity was
A. 0.11. B. 8.85. C. 11.30. D. 14.25.
An increase in the relative price of a good cannot be caused by
A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good. B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good. C) a decrease in the nominal price of the other good while the price of the good itself remains constant. D) an increase in the nominal price of the other good while the price of the good itself remains constant.
The Fed's policy is determined by the
A) Federal Open Market Committee. B) Executive Council to the Governor. C) Regional Federal Reserve Banks. D) Board of Governors. E) Federal Monetary Policy Committee.