Households make their savings available to borrowers through
a. resource markets
b. the loanable funds market
c. the labor market
d. the taxes
e. spending
B
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Under a binding price ceiling, what does the change in producer surplus represent?
A) The gain in surplus for those sellers who are still willing to supply the product at the lower price. B) The loss in surplus associated with those units that used to be produced at the higher price but are no longer produced at the lower price. C) The gain in surplus associated with the excess demand created by the price ceiling policy. D) Both A and B are correct. E) Both A and C are correct.
When an individual withdraws funds from a checking account the:
A. bank's balance sheet shrinks and so does the Fed's balance sheet. B. bank's balance sheet shrinks but the size of the Fed's balance sheet increases. C. bank's balance sheet shrinks but the size of the Fed's balance sheet is not affected. D. size of the bank's balance sheet stays the same but the size of the Fed's balance sheet shrinks.
If you believe that stock prices follow a random walk, then probably you
a. do not believe that there is positive relationship between risk and return. b. do not believe that stock prices reflect all available information. c. believe in the validity of the efficient markets hypothesis. d. believe that it is a good idea to engage in fundamental analysis.
When an economy is operating at its full employment rate of output:
A. the rate of unemployment will be zero. B. output will exceed the economy's maximum sustainable rate. C. the actual rate of unemployment will equal the natural rate. D. the economy's potential rate of output will exceed actual GDP.