Which of the following will tend to decrease the excess reserves of the commercial banking system?
a. The central bank buys bonds from the public
b. The central bank sells bonds to a commercial bank.
c. The central bank reduces its discount rate.
d. The central bank decreases the required reserve ratio.
b
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Which of the following correctly describes the interest-rate effect?
a. If the price level decreases, consumer purchasing power decreases, the demand for credit rises, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls. b. If the price level decreases, consumer purchasing power increases, the demand for credit rises, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls. c. If the price level decreases, consumer purchasing power increases, the demand for credit falls, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls. d. If the price level decreases, consumer purchasing power increases, the demand for credit falls, interest rates fall, debt-financed borrowing increases, and real GDP demanded increases.
The general consensus on minimum wage laws is that they: a. do create some unemployment
b. Directly affect workers at all skill levels. c. lead to extremely low rates of unemployment. d. increase employment possibilities for teenagers.
Economists believe that there are many nonmonetary gains from further trade opening. Which of the following is NOT one of those potential gains?
A) Economies of scale from increased production decreases costs. B) Intensified competition lowers prices. C) Governments will be less reliant on tariff revenue. D) Diversification of production lowers risks.
Use the figure below to answer the following question:
In the graph above, what is the price elasticity of supply (using the midpoint formula) between points A and B?
A. 3 B. 1/3 C. 2 D. 1