If the Treasury prints currency to finance an expenditure, the impact on the money supply is similar to when the Treasury borrows from the
A) banking system when it is fully loaned-up.
B) banking system when it has excess reserves.
C) non-bank public.
D) Federal Reserve.
D
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Increases in interest rates
A) reduce borrowers' net worth. B) reduce lenders' net worth. C) increase the present value of borrowers' assets. D) raise the cost to businesses of internal funding.
The authors claim that monopolists will tend to practice stronger conservation of depletable resources than would occur under a perfectly competitive market structure. Why is this true?
A) Monopolists are typically taxed at higher rates than competitive firms, so they will tend to reduce output and revenues in order to minimize their tax expenditures. B) The profit-maximizing decisions of a monopolist tend to generate lower output levels than under perfect competition, so the resource is depleted at a slower rate by the monopolist. C) Common property resource problems do not arise when there is only one seller. D) The lower depletion rate used by monopolists serves as a barrier to entry.
Which of the following costs of inflation can be significant even if actual inflation and expected inflation are the same?
a. menu costs b. inflation tax c. shoeleather costs d. All of the above are correct.
In 2007, investment in France increased by 7 billion euros. Which of the following occurs?
I. an upward shift in the AE curve II. a leftward shift in the AD curve III. an increase in the price level and real GDP in the short run IV. an increase in the price level and no change in real GDP in the long run. a) I, II, III, & IV b) I & III only c) I, II, & IV only d) III & IV only