Which of the following events would most likely be considered a macroeconomic shock?
A) A drought destroys 25% of the strawberry crop in California.
B) Mismanagement results in a federal takeover of the largest credit union in the United States.
C) OPEC unexpectedly announces a 40% reduction in oil production.
D) The Federal Reserve decides to increase the discount rate by 0.25% for the third time in 12 months.
C
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In the national income accounting identity Q = C + S + T, T stands for
A) taxes. B) transfers. C) taxes minus transfers. D) taxes plus transfers.
Commercial banks
A) buy private placements for their own portfolio of assets. B) help firms sell private placements. C) sell their own private placements. D) have nothing to do with private placements.
The problem with a detailed federal government budget is that: a. monetary policy becomes more difficult to implement
b. it reduces the flexibility of discretionary fiscal policy. c. Congress cannot keep it up to date. d. there is a shortage of congressional committees that deal with the budget. e. there is a short review period, resulting in poor choices in funding programs.
The law of diminishing marginal utility states that: a. total utility decreases as consumption of a good increases
b. total utility increases as consumption of a good increases. c. the increase in total utility from consuming an additional unit decreases as consumption increases. d. the increase in total utility from consuming an additional unit increases as consumption increases.