An increase in the reserve requirement increases reserves and decreases the money supply
a. True
b. False
Indicate whether the statement is true or false
False
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The graph below represents the market for alfalfa. The equilibrium price is $7.00 per bushel, but the market price is $9.00 per bushel
Identify the areas representing consumer surplus, producer surplus, and deadweight loss at the equilibrium price of $7.00 and at the market price of $9.00.
If housing prices are expected to increase, then, other things equal, the demand for houses will ________ and that of Treasury bills will ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
The rationing function of price
A) occurs when there is a movement of resources into or out of markets as a result of changes in the equilibrium market price. B) is also known as the guiding function of price. C) occurs when consumers change their tastes and preferences. D) occurs only when the market experiences severe shortages.
When a family's income is low and it is spending more on consumption than it is receiving in income
A) the APC must be increasing. B) the APC must be equal to the ratio of planned consumption expenditure to total saving. C) the MPC must be zero. D) some segment of the consumption function curve lies above the 45-degree line, indicating dissaving.