If banks are fully loaned up, have no excess reserves, and the required reserve ratio is raised, the amount that banks can lend is:
a. reduced and the money supply contracts.
b. reduced and the money supply expands.
c. reduced and there is no change in the money supply.
d. increased and the money supply expands.
e. increased and the money supply contracts.
a
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An example of a discretionary fiscal stimulus policy is
A) decreasing government expenditure. B) the automatic increase in needs-tested spending during a recession. C) decreasing needs-tested spending. D) cutting taxes. E) induced taxes.
A perfectly competitive firm will shut down when the price is just below the minimum point on the
A) average fixed cost curve. B) average total cost curve. C) marginal cost curve. D) average variable cost curve. E) marginal revenue curve.
In the short run, a firm can minimize its total costs of production by operating at the minimum of its average total cost curve
Indicate whether the statement is true or false
All of the following is likely to increase the supply of U.S. dollars in the forex market except?
A. If U.S. interest rates are low relative to foreign interest rates B. If investors' confidence in foreign economies increases C. If U.S. consumers prefer foreign goods to U.S. goods D. If investors’ confidence in US investments increases.