What do "increasing the reserve requirement ratio" and "increasing the discount rate" have in common?
What will be an ideal response?
Both are ways the Fed can decrease the quantity of money.
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Use the following graph for a perfectly competitive firm generating a loss in the short run to answer the next question.
Which of the following market changes would allow the firm to earn an economic profit?
A. an increase in the number of firms entering the industry B. a decrease in market demand C. a decrease in the price of the industry's product D. an increase in market demand
The demand curve represents the buyer's side of the marketplace
Indicate whether the statement is true or false
Suppose tennis shoes cost $50 per pair and firms supply 50,000 pairs of shoes. If the price decreases to $45 and firms decide to supply 48,000, the elasticity of supply equals
A) 0.0025. B) 0.04. C) 2.63. D) 0.39.
Which of the following is not a potential source of comparative advantage for China in the manufacturing sector?
A) Abundant low wage, low skill workers B) A large domestic market that can lead to scale economies C) Coastal areas with good logistics for international trade D) Abundant credit from China's government sector to set up manufacturing operations