For the average living standard of a nation to rise, the only thing that needs to happen is for nominal GDP to increase faster than the price level
a. True
b. False
B
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to increase the money supply by $400 billion to drive down interest rates and stimulate the economy. Assuming that the money multiplier is operating to full effect, to accomplish the desired increase, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks B. sell $20 billion of U.S. securities to the banks C. buy $20 billion of U.S. securities from the banks D. buy $40 billion of U.S. securities from the banks
A firm is producing a joint product, Product A and Product B, with variable proportions. At its current production levels, the marginal benefit of producing Product A is $2 and the marginal cost is $4 and the marginal benefit of producing Product B is $5 and the marginal cost is $3. To maximize profits, the managers of the firm should produce ________ of Product A and ________ of Product B.
A) more; more B) less; less C) less; more D) more; less
Under which conditions might diseconomies of scale result?
A. hampered coordination brought about by bureaucracy B. increasing costs of inputs C. the firm uses a large amount of indivisible inputs D. both hampered coordination brought about by bureaucracy and increasing costs of inputs
The official number of poor in the United States
A) is higher today than at any other time in our history. B) has risen steadily since 1981. C) was lowest in the late 1960s. D) is lowest today.