During a recession, profit-oriented banks would be prone to reduce the money supply by increasing their excess reserves and declining to lend to less creditworthy applicants.
Answer the following statement true (T) or false (F)
True
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Two actions by the Fed during Alan Greenspan's term as chairman have been identified as possibly contributing to the financial crisis in 2008. Which of the following was one of those actions?
A) working in concert with the European Central Bank to stabilize the dollar / euro exchange rate B) financing the first Gulf War by printing money and generating rapid inflation C) decreasing the money supply to fight the possibility of disinflation D) the decision to keep the federal funds rate at 1 percent from June 2003 to June 2004
Marginal cost is defined by the slope of the total revenue curve.
Answer the following statement true (T) or false (F)
When the economy moves from point A to B in the above table, the opportunity cost of a computer in terms of televisions is
A) 10. B) 2.5. C) 2. D) 0.5.
Suppose that the market for fresh California navel oranges is in equilibrium and then an unanticipated freeze destroys half of the California navel orange crop. Assuming all other factors affecting supply or demand remain unchanged, how would you expect this event to change the market equilibrium for California navel oranges?
a. The demand for navel oranges would decrease resulting in a lower market equilibrium price and quantity. b. The supply of navel oranges would decrease resulting in a higher market equilibrium price and a lower market equilibrium quantity. c. Both supply and demand would increase, resulting in an increase in equilibrium quantity and an indeterminate change in price. d. Both supply and demand would decrease, resulting in a decrease in both equilibrium quantity and price.