Equilibrium real GDP is
a. independent of the price level
b. determined solely in the loanable funds market
c. controlled by the Fed
d. directly related to the interest rate
e. the level of output at which total spending equals total output for a given price level
E
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When the desired reserve ratio is 10 percent, suppose the Fed buys $1,000,000 of government securities from banks. As a result, the banks' excess reserves
A) increase by $900,000. B) increase by $1,000,000. C) increase by $10,000. D) decrease by $10,000. E) decrease by $1,000,000.
The Wong family consumes 3 pounds of fish and 5 pounds of chicken per month. The price of fish is $8 per pound and chicken is $4 per pound
a. What is the amount of income allocated to fish and chicken consumption? b. What is the price ratio (the price of fish relative to the price of chicken)? c. Explain the meaning of the price ratio you computed. d. If the Wongs maximize utility, what must the ratio of the marginal utility of fish to the marginal utility of chicken be equal to? e. If the price of chicken rises, will the Wong family consume more chicken, less chicken, or the same amount of chicken? Explain your answer using the rule of equal marginal utility per dollar.
Refer to Figure 12-17. The graphs depicts a short-run equilibrium. How will this differ from the long-run equilibrium? (Assume this is a constant-cost industry.)
A) The price will be higher in the long run than in the short run. B) The market supply curve will be further to the left in the long run than in the short run. C) The firm's profit will be lower in the long run than in the short run. D) Fewer firms will be in the market in the long run than in the short run.
If Y = A × N × (75 + K/N), where K = 1000, N = 20, and A = 10, what happens if K doubles and N doubles?
A) Y is unchanged. B) Y increases by 50%. C) Y doubles. D) Y quadruples.