What happens in the money market when there is a decrease in the supply of money?
A) The equilibrium quantity of money increases and the equilibrium interest rate increases.
B) The equilibrium quantity of money increases and the equilibrium interest rate decreases.
C) The equilibrium quantity of money decreases and the equilibrium interest rate increases.
D) The equilibrium quantity of money decreases and the equilibrium interest rate decreases.
Ans: C) The equilibrium quantity of money decreases and the equilibrium interest rate increases.
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 If Island Bikes charges a single price to all of its customers, then what will be its daily economic profit?
A. $26 B. $36 C. $27 D. $33
The increasing availability of temporary job placement agencies and online job services has ________ the efficiency of matching workers and jobs, and has therefore ________ the natural rate of unemployment in the United States.
A. decreased; decreased B. increased; decreased C. increased; increased D. decreased; increased
International participants
A. Participate only in American product markets. B. Participate only in American factor markets. C. Take no part in American markets. D. Participate in both American factor markets and American product markets.
In the above figure, assume the economy starts out in equilibrium at point d. If the Fed increases the money supply so that the new aggregate demand curve is AD3, then the new short-run equilibrium will be at point
A. a. B. b. C. c. D. i.