Suppose that the Fed purchases a $1,000 government bond from you. If you deposit the entire $1,000 in your bank, what is the total potential change in the money supply as a result of the Fed’s action if reserve requirements are 10 percent?
A. $10,000
B. $5,000
C. $3,000
D. $2,000
Answer: A
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If a bank has $6 billion in reserves and loans $2 billion to another bank, then the total quantity of reserves demanded is:
A) $6 billion. B) $8 billion. C) $2 billion. D) $4 billion.
Refer to Figure 4-1. If the market price is $2.00, what is the consumer surplus on the first burrito?
A) $0.50 B) $1.00 C) $2.00 D) $7.50
One effect of a minimum wage in the market for low-skilled labor is
A) a shortage of low-skilled labor. B) a surplus of low-skilled labor. C) no effect in the market for low-skilled labor. D) an increase in demand for low-skilled labor.
A shift in the demand curve means
a. a change in demand at every price b. a rise in prices c. a decrease in both price and quantity demanded d. a change in consumer income