To increase the money supply, the Fed can ______.
a. raise reserve requirements
b. lower the discount rate
c. sell bonds
d. increase the interest rate paid on reserves
b. lower the discount rate
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If the world price for good A is below the domestic price for good A without trade, then the price the consumer pays for good A will ________ and the price the producer receives for good A will ________ with trade.
A. increase; increase B. decrease; decrease C. increase; decrease D. decrease; increase
A firm uses two factors of production. Irrespective of how much of each factor is used, both factors always have positive marginal products which imply that
A) isoquants are relevant only in the long run B) isoquants have negative slope C) isoquants are convex D) isoquants can become vertical or horizontal E) none of the above
Educational reforms that result in improved reading and math skills of high school graduates as they enter the labor force would do what to the aggregate supply curve?
a. Shift it outward. b. Shift it inward. c. Move the economy up along the curve. d. Move the economy down along the curve.
The average propensity to consume is the
A) percentage of total disposable income consumed. B) ratio of changes in planned consumption to changes in real disposable income. C) rate at which real disposable income changes as planned consumption changes. D) slope of the consumption function.